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UNIVERSITY OF VAASA
SCHOOL OF MANAGEMENT
Rabia Jabeen
ORGANIZATIONAL CRISIS MANAGEMENT
A conceptual framework for public sector organizations
Master’s thesis in
Public Management
VAASA 2018
1
TABLE OF CONTENTS
Page
LIST OF FIGURES / LIST OF TABLES 3
ABSTRACT 5
1. INTRODUCTION 7
1.1. Background 7
1.1.1. Crisis in organizations 8
1.1.2. Disaster 9
1.2. Crisis management 9
1.3. Crisis vs. risk management: A quick overview 10
1.4. Types of crisis 11
1.5. Research statement and research questions 13
1.6. The structure of the study 15
2. A MODEL FRAMEWORK OF CRISIS MANAGEMENT: THEORETICAL
FRAMEWORK 16
2.1. Fink’s crisis life cycle 17
2.1.1. Prodromal stage 18
2.1.2. Acute stage 18
2.1.3. Chronic stage 19
2.1.4. Crisis resolution stage 19
2.2. Turner’s six stages of failure in foresight 19
2.2.1. Normal starting point 21
2.2.2. Crisis incubation period 22
2.2.3. Precipitating event 22
2.2.4. Onset of crisis 23
2.2.5. Rescue and salvage 23
2.2.6. Full cultural readjustment 24
2
2.3. Mitroff’s five stages of crisis management 24
2.3.1. Origin of the model 25
2.3.2. Signal detection 26
2.3.3. Prevention and preparedness 27
2.3.4. Damage containment 28
2.3.5. Recovery 28
2.3.6. Learning 28
2.4. Coombs three-stages approach 29
2.4.1. Pre-crisis phase 29
2.4.2. Crisis response 30
2.4.3. Post-crisis phase 32
2.5. Mitroff & Anagos five components framework and assuming responsibility 33
2.5.1. Types of crisis/risk 34
2.5.2. Mechanism 35
2.5.3. Organizational system 35
2.5.4. Stakeholders 36
2.5.5. Scenarios 37
2.5.6. Assuming responsibility 37
2.6. Summary 37
3. ARGUMENTATIVE STRATEGY 40
4. MAIN ARGUMENTS 43
4.1. Research question # 1: What is the nature of the crisis that exists in public
organization. 43
4.1.1. Sub-question: How public organizations are different from other types of
organizations. 43
4.1.2. Sub-question: What is the nature of the crisis and what causes them to arise in
public organizations. 45
4.2. Research-question # 2: Identification of critical factors that plays a significant
role in dealing with organizational crisis management. 49
4.3. Research question # 3: To evaluate the role of organizational leadership in
managing crisis situations. 54
4.3.1. Sub-question: How a good leader reacts to the crisis and control the situation. 55
3
4.3.2. Sub-question: What would be the response strategy, or damage containment
approach if leadership itself falls into crisis. 56
4.4. Research question # 4: To map suitable contingency management strategies
based on the emergency response, size and scale of the crisis in organizations. 61
4.4.1. Real-life case#1: King’s Cross railway station, London (1987) 63
4.4.2. Real-life case#2: Pepsi syringe hoax failure (1993) 68
4.4.3. Real-life case#3: PNC bank Philadelphia USA (1996) 73
Synopsis: Real-life examples 77
5. SUMMARY AND CONCLUSION 79
REFERENCE 82
4
LIST OF FIGURES/ LIST OF TABLES
Figure 1. Five-phase crisis management model. 25
Figure 2. The Onion Model: The layers of an organization. 36
Figure 3. Leadership in crisis response model (quick overview). 58
Figure 4. Graphical representation of King’s Cross railway station fire incident in 1987.
65
Figure 5. Graphical representation of Pepsi hoax in 1993. 70
Figure 6. Graphical representation of Crisis life-cycle for PNC bank building fire in
1996. 75
Table 1. Main perspectives in crisis management. 16
Table 2. Turner’s sequence of failure in foresight. 20
Table 3. Types of risks/crisis. 34
Table 4. Crisis management activities in four different crisis models. 39
5
UNIVERSITY OF VAASA
School of Management
Author: Rabia Jabeen
Master’s Thesis: Organizational Crisis Management
Degree: Master of Administrative Sciences
Major Subject: Public Management
Supervisor: Omoregie Charles Osifo
Year of Graduation: 2018 Number of pages: 87
ABSTRACT:
The crisis is a condition that represents a disruption of normal operations of an organization and affects its
major goals. A crisis may happen due to mismanagement, negligence, economic volatility, technological
failure, political and social changes, and natural disasters. Crisis management refers to the set of coordi-
nated activities to prevent a crisis or ensure damage control.
A great deal of research has been carried out to devise effective and efficient strategies for dealing with
diverse types of crises in organizations. However, the existing literature still has a lot of room to address
various crisis management aspects for public sector organizations.
The main objective of this study is to examine the nature of crisis faced by public sector organizations
and provide a conceptual framework with suitable and effective crisis management strategies and models.
This is achieved by investigating four fundamental areas of crisis management in public organizations
including nature of crises, critical factors involved, organizational leadership and extracting suitable con-
tingency management strategies from real-life examples according to the size and scale of the crisis.
The argumentative approach is followed to review a wide range of relevant literature, compare crisis
management models and strategy, and evaluate the research questions. Finally, it is concluded that the
role of leadership, effective communication within and outside the organization with stakeholders, and a
healthy organizational culture are the most important elements in containing crisis situation even if lim-
ited resources are available. However, a reliable crisis management plan must exist and rehearsed in pub-
lic sector organizations.
KEYWORDS: crisis management, crisis types, stages of crisis, organizations, damages, leadership, re-
sponse, prevention, recovery, reputation.
7
1. INTRODUCTION
1.1. Background
Today, it believes that good governance comes with the instant aid and appropriate re-
sponse to the citizens, their properties, businesses and life in an unprecedented crisis.
Moreover, governments’ action speaks out their proprieties and gain the citizens’ confi-
dence by swiftly and efficiently react to a crisis. Even though the crisis creates disas-
trous and overwhelming results in a globally connected economy beyond boundaries.
Where other factors like effective coordination between various sectors are required to
mitigate the complexity of crisis in emergency aid and services. This coordination takes
place at the centres of the governments, while crisis management exercise at sub-
national levels. It is inevitable that in newspapers and electronic media, we came across
many crises, often consisting of new threats, to name a few here are the worst humani-
tarian crisis in form of famine and starvation, economic crisis, monetary crisis, refu-
gees’ crisis, tsunami, earthquakes, and terrorist attacks; that governments may confront
each day. Many of them may have a disastrous impact on boundaries and create great
economic knock-off effects. To alleviate these damages, governments continuously in-
volve in evolutions of risk and crisis management, over last many decades. But the ef-
forts are more challenging when governments are confronted with the trans-boundary
nature of the crisis: that spread across policy borders (between administration, sector,
public-private etc.) and/or geographic borders (between nations, states or other local
authorities). Additionally, the fact of unexpectedly large scale and unpreceded nature of
crisis creates more complications in evaluation and management, which brings up un-
certainty and challenge government structure between many stakeholders in public and
private sectors (Baubion, 2013.)
The term crisis originates from the Greek words Krisis and Krinein. The first-word
Krisis was used by Greek physician Hippocrates as a medical term to indicate the turn-
ing point for a disease. Whereas another word krinein means to decide, discern, sepa-
rate or judge (Sellnow, Matthew, & Timothy, 2013: 8). Any event that can affect nega-
tively to the people, property, economy, or society comes under the definition of crisis.
8
The situation in which quick decisions are normally required to run routine activities,
business or a system.
In a broader view, the crisis is some breakdown of a system that creates a shared stress
(R.W. Perry 2007). We can apply this general definition of crisis to diverse event cate-
gories. To conceptualize the notion of crisis, we can take it as a starting and subdivide
into two distinct classes namely; (1) crisis in organizations and (2) disasters.
1.1.1. Crisis in organizations
A crisis is a series of unpredictable events that can possibly intimidate prospects of the
stakeholders in terms of health, safety, environment, and economic issues. This can pre-
sent adverse effects on organizational performance and can also cause undesirable out-
comes. From this primary view of the organizational crisis, we can say that it is the per-
ceptions of the stakeholders that articulate the events into a crisis, unlike natural disas-
ters. Therefore, if stakeholders keep the view that organization is dealing a crisis, then
most probably a crisis exists. Hence, management in an organization needs to carefully
assess the events from stakeholder’s viewpoint to establish the occurrence of a crisis.
Based on event pattern, it is possible to anticipate an imminent crisis and strategize
wisely to deal with it. The crisis is usually unpredictable and gives an element of sur-
prise, and can devastate an organization. The crisis has a potential to bring detrimental
outcomes on the business since disruption can cause great financial losses, which in-
clude reduced productivity and drop in earnings. Other major consequences may include
a tarnished reputation for specific products or brand.
In short, three elements are common to an organizational crisis: (a) a threat to the organ-
ization, (b) the element of surprise, and (c) a short decision time (Seeger, 1998). (Ve-
nette, 2003) maintains that "crisis is a process of transformation where the old system
can no longer be maintained." The need for change is however the fourth key element
to consider. If there is no room for changes, it is labeled as a complete failure or inci-
dent. The difference between incident and crisis demonstrates the implication of serious
impact.
9
1.1.2. Disaster
Disasters are events that are abrupt and unexpected, and can seriously interrupt system
processes. They require immediate and new courses of action to cope with the interrup-
tion of system services (Quarantelli, 2005). Contrasting organizational crisis, disasters
are large-scale and multiple high-level agencies or governmental units are required to
respond for assistance. Disasters can offspring organizational crisis, for instance, power
loss due to a natural disaster can lead to disruption of production services resulting in
the supply shortage. A great deal of research has been conducted so far presenting
frameworks, strategies and models to cope with disasters. Some common literature also
exists that intersect crisis and disasters.
1.2. Crisis management
With a brief preamble given above, we can consider crisis management as a set of fac-
tors that are designed to fight the crisis and minimize the actual damages inflicted. Al-
ternatively, it is a set of tools that prevent the negative outcomes of a crisis, thereby,
protecting the organization and stakeholders (Coomb, 2007.)
In general, we can consider crisis management as the process through which an organi-
zation deals with such events that threaten the existence of an organization in any form
and harming stakeholders or the public. The origin of research on crisis management is
associated with the large-scale industrial and environmental disasters in the 1980s
(Shrivastava, 1988). Crisis management is considered to be a key element in public rela-
tions (ASIS SPC.1–2009).
Coombs describes the evolution in crisis management from basic emergency prepared-
ness to a set of four interconnected elements: prevention, preparation, response and re-
vision. Let us briefly review these elements individually.
10
Prevention corresponds to necessary actions or steps taken in order to avoid or alleviate
the crisis situations. This is the main area for the high-level involvement of management
to notice and identify signal to contain the crisis before it actually happens.
Preparation is a crucial phase in crisis management and signifies the planning phase.
The typical outcome of this phase is a Crisis Management Plan (CMP). CMP is also a
reputation building factor for an organization to demonstrate its capability to cope with
unexpected events and disruption. This phase involves a critical analysis of possible
susceptibilities, competence development of crisis management team for an efficient
and quick response, media handling and training for spokespersons, crisis portfolio con-
ception, crisis simulation or exercises, and crisis communication and coordination.
Response refers to the application phase of crisis management where the CMP is im-
plemented to deal with a potential crisis. The response must be evaluated periodically to
test and identify possible weaknesses in the CMP, so-called CMP fitness test. This
phase is open to public criticism and is typically criticized in media during an actual
crisis. The final stage of response phase or the main objective of the response phase is
the recovery from crisis and resumption of normal operations. This stage is commonly
termed as business continuity. Sooner an organization return to normal operations,
smaller will be the financial losses incurred during a crisis.
The final phase in crisis management is the evaluation phase which determines the qual-
ity of response and CMP for a crisis. This crisis management performance evaluation is
utilized for prevention, preparation and response efforts. The more crisis an organiza-
tion experiences, the more capable it is to deal with similar situations in future.
1.3. Crisis vs. risk management: A quick overview
In contrast to risk management, which is an ongoing process where potential threats are
highlighted and fine methods are adopted to avoid those threats, crisis management in-
volves dealing with threats before, during, and after they have occurred. Risk manage-
ment leans towards proactivity, on the other hand, the crisis management is considered
11
more of a reactive nature. No matter how good we define the risk management proce-
dures; there are always situations that require a concrete crisis management plan. Risk
management is strategic in a sense that it involves the identification of possible threats,
assessment of their likelihood and impact of taking necessary measures to control and
minimize the risks.
1.4. Types of crisis
The research over the years by scholars and leading experts in the field of crisis man-
agement has produced a great deal of literature for the classification of crisis (Mitroff
and Killman, 1984; Meyers, 1988; Lerbinger, 1997; Coombs, 1999; Coombs and Hol-
laday, 2002). The prime objective of these studies has been to facilitate the strategic
development of crisis management framework for organizations so that they can effec-
tively handle a crisis situation. For instance, Mitroff and Killman (1984) have catego-
rized seven types of crisis that they pronounce corporate “evils”: product tampering,
product defects, product piracy, and false accusation, hazards of narrow thinking, hoax-
es, and cultural insensitivity. Meyers (1988), on the other hand, identified nine types of
business crisis, namely, the crisis in public perception, sudden market shifts, product
failures, top management succession, financial drain, industrial relations, hostile takeo-
vers, adverse international events and regulation, and deregulation of the industry.
Lerbinger (1997) developed four kinds of crisis groups called a technological crisis,
confrontational crisis, the crisis of malevolence, and the crisis of managerial failure.
Nevertheless, the most exciting and useful classification was proposed by Coombs
(1999) and later refined and extended by Coombs and Holladay (2002). This classifica-
tion or taxonomy is based on crisis responsibilities or the degree of responsibility that
can be attributed to an organization for the crisis. As the matter of fact, the authors de-
liberate that increased ascriptions of crisis responsibility spawn strong resentment and
reduction in reputation scores and that
“by identifying the crisis type, the crisis manager can anticipate how much responsibil-
ity stakeholders will attribute to the organization at the onset of the crisis thereby estab-
lishing the initial crisis responsibility level.” (Coombs 2007a: 166, 168.)
12
Coombs (1999) categorizes crisis into nine basic types such as natural disasters, ma-
levolence, technical breakdowns, human breakdowns, challenges, mega-damage, organ-
izational misdeeds, workplace violence, and rumours. Based on the organizational re-
sponsibility, Coombs (2009) grouped these nine crises into five clusters (rumours, natu-
ral disasters, malevolence, accidents and misdeeds).
Observing significant variations in crisis, Coombs and Holladay (2002) suggested a
more distinguished classification of crisis situations and proposed a selection of ten cri-
sis-response strategies. The relationship between crisis and response nomenclatures led
to a new theory called the Situational Crisis Communication Theory (SCCT). The au-
thors, hence, classified crisis into thirteen crisis types and grouped them into three clus-
ters. Each of the crisis type in a cluster shares a similar level of crisis response with the
others (Coombs and Holladay, 2002.)
A category of the cluster, called the victim cluster, consist of crisis types in which the
organization is considered as a victim of the crisis together with the stakeholders (Natu-
ral disaster, Rumor, Workplace violence, Product tampering, etc.). These crisis types are
least designated to crisis response.
Another different category, known as an accidental cluster, contain all crisis that
represents involuntary actions by the organization since they did not intend to create a
crisis. The crisis within this cluster include Challenges, Technical-error accident, Tech-
nical-error product harm, etc. The crisis in this cluster yield modest attributions of crisis
responsibility. The preventable cluster comprises of crisis which implicates either
intentionally placing stakeholders at risk, or willingly taking unsuitable actions, or
human error that could have been avoided (Human-error accident, Human-error
product harm, Organizational misdeed with no injuries, Organizational misdeed, man-
agement misconduct, Organizational misdeed with injuries).These crisis types result in
strong attributions of crisis response, and thus, characterize a severe reputational threat
to an organization.
13
1.5. Research statement and research questions
It has been noted that crisis occur with disastrous impact on numerous things as, a crisis
is “a major occurrence with a potentially negative outcome affecting the organization, compa-
ny, or industry, as well as its public, products, services, or good name” (Fearn-Banks 2002:
2.)
Crisis is “a major, unpredictable event that has potentially negative results the events and its
aftermath may significantly damage an organization and its employees, products, services, fi-
nancial condition and reputation” (Barton 1993: 2.)
The above statements may be true, but the crisis is not all about negative things, as pro-
posed by (Augustine, 2000) “Almost every crisis contains within itself the seeds of success as
well as roots to failure”.
Therefore, the impact and occurrence of crisis mostly depend on how organizations,
leadership and management react and handle the situation. To consider another veiled
aspect of crisis management exclusively important in leadership, we need to explore the
benefits of good relationship in the workplace during normal business activities and
notably in tough times. It is also important to examine how good leadership influences
social attributes such as trust. (Osifo, 2016). As proposed by (Simola 2003: 354) in his
ethic of care approach to creating and strengthening the relationship between people
(specifically in the workplace) is imperative. It has been emphasized by (Gilligan, 1982)
that recognition of others’ feelings is as important as self, harm and care are destructive
and beneficial in all relationships equally, whether created by self or others. A good
relationship can only be maintained if it considers the feelings of others (Tronto, 1993).
When people walk in other’s shoes, they judge them justly and impartially (Rawls,
1971). Further elaborating to Rawls (1971) initial proposal (Kohlberg, 1973) suggested
that individuals who are morally mature should take fair and impartial decisions.
In view of the above statements, I proposed here my research statement and try to sup-
port my thesis by investigating the research questions by applying the argumentative
strategy.
14
It believes that there is no way to crisis-proof an organization, and tenacious
behaviours elevate the possibility of crisis to occur. Studies have shown that there are
fewer precautionary measures when organizations carefully prepare for that commit-
ments to critical factors that mitigate chances to confront with the crisis, additional
consideration for good leadership along with suitable contingency management models
can repress greater chances of organizational and leadership crisis.
This thesis aims at exploring the crucial aspects of crisis management; the very first
thing which needs attention is to define the nature of crisis prevail in public organiza-
tions. The crisis management in organizations is specifically emphasized since it is
scarce in the literature. To proceed with further elucidation, I differentiate public and
private organization and compliment with critical factors that help organizations in cri-
sis. Moreover, I try to explore the quality of good leadership in crucial times, mean-
while to reflect the other side when leadership itself face some crisis of leaving key
manager—considered as an asset of the company due to the unsuitable behaviour of the
executive officer. To illuminate this, following research questions have been formulated
to provide a comprehensive picture of the organizational crisis management.
Research question # 1: What are the nature of the crisis that exists in public organ-
izations.
Sub-Question: How public organizations are different from other types of organiza-
tions.
Sub-Question: What is the nature of the crisis and what causes them to arise in public
organizations.
Research question # 2: Identification of critical factors that plays a significant role
in dealing with organizational crisis management.
Research question # 3: To evaluate the role of organizational leadership in manag-
ing crisis situations.
Sub-Question: How a good leader reacts to the crisis and control the situation.
Sub-Question: What would be the response strategy, or damage containment approach
if leadership itself falls into crisis.
15
Research question # 4: To map suitable contingency management strategies based
on size and scale of the crisis in organizations.
1.6. The structure of the study
The structure of this study is as follows; Chapter II presents the theoretical framework
of crisis management by renowned authors. Here, various models have been defined in
shape of crisis life cycle. This chapter instigates with Fink’s crisis model that explains
the analogy of disease with crisis life cycle. Turner’s six stage of failure in foresight
investigates the reasons for crisis negligence and intelligence failure. It also includes
Mitroff’s five stages model along with five components framework of crisis manage-
ment to provide the understanding of crisis types, mechanism, organizational system
and assuming responsibility. Lastly, Coombs crisis cycle explains the most prominent
three phases of crisis cycle namely; pre-crisis, crisis response and post-crisis.
Chapter III describes the methodology used in this study; what kind of research, theoret-
ical framework, and the information is used. For the conceptual research, most data
from internet, books and published papers were used. Based on the nature of my re-
search, I used paper and pen technique to address my research questions.
Chapter IV is the crux of this study because, in this chapter, main arguments of my re-
search discourse. It exhibits the profound analysis of research questions, and address
them more precisely.
Finally, chapter V concludes the research study and provide future recommendations.
16
2. A MODEL FRAMEWORK OF CRISIS MANAGEMENT: THEORETICAL
FRAMEWORK
Crisis management literature is rich with the crisis staged models and various scholars
have been contributed in this regard. The following (Table 1.) exemplifies a quick over-
view of the most prominent models originated in the different span of time to provide
strategies for organizational crisis management.
Table 1. Main perspectives in crisis management.
Steven Fink (1986) Crisis
Life Cycle
Encyclopedia of Crisis
Management: Sage Publica-
tions, Business & Economy
2013
The earliest model describes the
consecutive stages of crisis life cycle
based on organizational demands. It
helps in crisis response and crisis
planning.
Barry Turner (1976) Six
stages of failure in foresight
Communication and Or-
ganizational Crisis: Mat-
thew Wayne Seeger, Timothy
Lester Sellnow, Robert R.
Ulmer
Greenwood Publishing
Group, 2003 - Business &
Economics
Turner’s crisis stages mainly focus
on complex organizations with so-
cial processes to develop social
norms, practices and process. He
takes disaster differently to name
them as the collapse of culture-crisis
in social orders and disorders.
Ian I. Mitroff (1992)
Five stages of crisis manage-
ment
Encyclopedia of Crisis
Management: Sage Publica-
tions, Business & Economy
2013
Communication and Or-
ganizational Crisis: Mat-
thew Wayne Seeger, Timothy
Lester Sellnow, Robert R.
Ulmer
Greenwood Publishing
Group, 2003 - Business &
Economics (96)
The most comprehensive model of
crisis management was proposed by
the father of modern crisis manage-
ment. The model consists of two
approaches pro-active and re-active
to prepare the organization to exam-
ine before and after the crisis occurs.
W. Timothy Coombs (2007)
Three Stage Approach
Crisis Management and
Communications: by W.T.
Coombs, 2007
It is three stage crisis approach con-
sisting of pre-crisis, crisis response
and post-crisis. This can help the
organizations to lessen the damage
in each phase during and before the
crisis.
17
Ian I. Mitroff and Gus Anag-
nos (2000)
Five Components Framework
and Assuming Responsibility
Managing Crises Before
They Happen: What Every
Executive and Manager
Needs to Know about Crisis
Management by Ian I. Mitroff
and Gus Anagnos
Crisis management framework clas-
sified into five components to deal
with man-made disasters in complex
organizational systems.
Despite the fact that crisis management models vary according to different scholars, but
they all provide a full-scale process to provide guidelines to tackle in each stage of the
crisis. In the following chapter detailed description of five crisis models have been pre-
sented as the model framework for crisis management.
2.1. Fink’s crisis life cycle
Steven Fink’s crisis life cycle is the earliest model considered as the first that describes
the consecutive stages of crisis based on organizational demand helps in both stages of
crisis response and crisis planning and widely applicable in crisis communication by
various scholars. Explicitly, the model developed for business orientation purpose but it
also effective in other types of crisis. An organization, when confronted the following
events, it seems to be in critical crisis condition and the model is applicable in this situa-
tion.
• When the events are, uncontrollable and going in the worse situation quickly.
• Media pressure and government scrutiny
• Disturbance in the normal business operation
• Endanger positive image of the organization and its officers.
• Company’s bottom line disrupted
According to Fink, both situations are considered as turning point whether the organiza-
tion controls the situation or the situation escalates in severity. If the events are recog-
18
nized and controlled, the crisis would not blow fully, otherwise, Fink’s model can be
applied (Penuel, Statler, & Hagen, 2013: 408.)
Disease analogy
Fink presented the anatomy of crisis by using human illness to elaborate the stages of
the crisis in sequence, where the time is an indefinite variable in any stage of crisis cy-
cle. If the organization truly face the crisis, all four stages of Fink’s crisis cycle can be
revealed in various times span, sometimes it can take years to unravel (Penuel et al.
2013: 408.)
2.1.1. Prodromal stage
Prodromal is the stage when the human body prevented from severe illness by early
recognition and treatment of symptoms in the patient. It is the first stage of Fink’s crisis
life cycle. Likewise, in organizations, prodromes can identify the serious risks and dan-
ger in early stage and prevent it prevailing in entire system from severe damage. On one
hand, prodromes may recognize early but due to unethical or careless behaviour, they
are ignored. This ignorance in response to warning signals can lead to inevitable crisis.
On the other hand, some prodromes are devious to recognize and no action can be taken
to avoid future crisis. These subtle warning signals later, recognize retroactively in the
third stage of Fink’s life cycle of the chronic stage. (Penuel et al. 2013: 408–409.)
2.1.2. Acute stage
Fink categorized this stage as no return point where half of the damage has already oc-
curred. Mistakenly, it is observed that the acute stage encompasses the whole crisis.
Though acute stage usually has short duration as compared to other three stages in
Fink’s crisis life cycle. (Penuel et al. 2013: 409.)
19
2.1.3. Chronic stage
It is the longest stage in Fink’s crisis lifecycle to repair the organization’s reputation
extending the period for more than a year. Additionally, in the chronic stage, organiza-
tions analyze their right and wrong actions taken during the crisis to fortify against a
future crisis. If organizations do not consider the importance of this stage is more likely
to experience the similar crisis in future. (Penuel et al. 2013: 409.)
2.1.4. Crisis resolution stage
Taking the Fink’s illness analogy, it is when the patient has recovered and well again,
the crisis resolution stage occurs. Crisis manager is responsible to reach the resolution
stage as soon as possible once the prodromal stage began. Any delay either intentionally
or unintentionally can prolong each stage and even before resolution stage, the
organization may dissolve due to failure to take the inescapable burden of the crisis.
Fink’s model has been used in various fields of crisis management including theoretical
analysis, crisis communication, cultural issues, building relationships, and crisis plan-
ning. It has been treated as a useful tool in distinct types of crisis for instance crisis of
September 11, 2001, terrorist attacks and SARS outbreak. (Penuel et al. 2013: 409.)
2.2. Turner’s six stages of failure in foresight
Barry Turner describes crisis as “failure in foresight” of “large-scale intelligence fail-
ure”. According to Turner, a little effort may require eliminating most crisis through
normal and routine structures. However, most organizations fail to identify the problems
of critical nature, and misses some threating cues, which leads to what Turner denotes
the failure in foresight. (Seeger, M. W., Ellnow, T. L., & Ulmer, R. R., 2003: 88.)
Notwithstanding the work of Barry Turner is mainly focused on complex organization,
however from a sociological perspective, Turner’s work on disaster is influenced other
20
crisis theories and frameworks. His work on order and organization analysis proposes
the sequence to accomplish intended tasks and diffused any mistakes on a broader level.
Though other sociologists are interested in the organization, the reason behind Turner’s
focus on social processes is to maintain order which is necessary for the development of
social norms, practices and processes. Turner takes the disaster differently, in his view-
point, the disaster is the collapse of culture, where the social norms cannot be carried
out accurately. Therefore, for Turner, the crisis is mainly about the nature and form of
social order and disorder.
Like other developmental stages of crisis by Fink, Mitroff and Coombs, Turner’s six-
stage sequence of failure in foresight also reflects the clear progression of crisis cycle.
Though Turner’s focus on socio-cultural dimensions makes it narrower than other de-
velopmental stages of the crisis, they are clear enough to emphasize on the risk avoid-
ance and risk belief, which furthermore helps to syndicate various stages by suggesting
logical relationships in a larger condition of crisis.
Turner’s six-stage sequence has a logical and clear relationship between each other, as
shown in (Table 2.), where change or development in one stage contribute to the later
stages of the model. For instance, any collapse in the social order of earlier stages like
incubation stage and precipitating event can affect the subsequent conditions of later
stages. Furthermore, Turner advice a social learning prompting to the new social under-
standing of risk, norms and structure of risk avoidance. Additionally, this learning from
failure helps others to understand the crisis and claims to be the best contribution in the
model. (Seeger, Matthew W., and Sellnow, Timothy, 2013: 37–39.)
Table 2. Turner’s sequence of failure in foresight.
Stage I. Point of normal Operations
(a) Culturally accepted beliefs about the world and its hazards
(b) Associated precautionary norms (set of laws, codes of practices, mo-
res, and folkways)
21
Stage II. Crisis incubation period
Unnoticed accumulation of events that are at odds with accepted beliefs
about hazards and their avoidance.
Stage III. Precipitating event
First sensing of crisis and realization of the inadequacy of fundamental
beliefs.
Stage IV. Onset of crisis
Period of direct impact and harm
Stage V. Rescue and salvage
Recognition of collapse of beliefs and initiation of ad hoc adjustments to
begin rescue and mitigation.
Stage VI. Full cultural readjustment of beliefs
Full readjustment based on inquiry and assessment; return to a new stage
I
______________________________________________________________________ Source: (Seeger, M. W., Ellnow, T. L., & Ulmer, R. R., 2003: 89.)
Table 2. presents a comprehensive picture of turner’s sequence of failure in foresight,
and each stage of the model has been discussed below.
2.2.1. Normal starting point
The stage I of Turner’s model is the starting point of normal operation and procedure in
which members have (i) “a set of culturally accepted beliefs about the world and its hazards,
and (ii) associated precautionary norms set out in laws, codes of practices, mores and folkways,
which are generally considered adequate.” (Tylor 1976: 381). These culturally accepted
beliefs, norms and procedures are interrelated and responsible for the administration of
the operation, any change in one stage automatically trigger another stage to variate.
(Seeger et al. 2003: 90).
22
2.2.2. Crisis incubation period
Turner’s stage II of crisis incubation period begins when the approval regarding hazards
in accepted norms/beliefs is absence, therefore, totally avoided and unnoticed. In
Turner’s viewpoint, events are either entirely anonymous or known but not fully under-
stood for acting. Later on, these known/misunderstood minor problems incubate and
girdle a wide range/area into inevitable crisis. It happens in two possible ways when a
minor problem is poorly handled and ultimately interact with other problems or the
problem may not be communicated timely to seek the attention of decision makers.
(Seeger et al. 2003: 90.)
2.2.3. Precipitating event
In stage III, a crisis appears through a trigger event resulted from the damage of accept-
ed beliefs and avoidance norms. This trigger event includes any breakdown, injury, vio-
lence, or fire, that transform a threat into crisis. Despite the clear distinction between a
normal and disrupted operation that cannot be ignored. A crisis, therefore, cannot be
well understood and defined, an ambiguity in nature of event prevail that can only sense
the signal of something went wrong. (Seeger et al. 2003: 90–91.)
The first evidence of the trigger event is either the lower level operators who inform the
upper-level management or decision makers about the upcoming crisis or it may per-
ceive by the outside agency or watchdog, who are hired to examine the organizational
activities. The immediate responsibility of the first perceiver is to convince the con-
cerned department that the problem actually exists. The treatment of crisis depends on
the severity of nature, if the crisis lacks dramatic features, it can be handled within the
parameters of the normal operation or the other way around.
Two factors are involved to determine the severity of the perceived threats, first is relat-
ed to the organizational goals, and the other is about the probability of the loss. In some
cases, the crisis is inevitable but may reduce the profitability whereas in other cases,
organization face higher risk of sustainability but chances of crisis are low. However, in
23
all cases, crisis manager should determine the possible outcomes and responses, before
the severity of the threat is known. Because in all type of situations, the exact nature of
the threat is hard to evident at first. Additionally, it is important to consider that the situ-
ation may become worse at any time during this stage, with the arrival of the latest in-
formation.
Time pressure, however, is another crucial factor of this stage, involved further compli-
cation to the severity of the threat. During stage III, for the readjustment of the accepted
belief and avoidance of hazards depends on the modification of the earlier stages. Con-
sequently, this modification can help decision makers to define and structure the nature
of the problem. (Seeger et al. (2003: 91.)
2.2.4. Onset of crisis
Stage IV includes the commencement of crisis, the scope and intensity of damage vary
from crisis to crisis but this stage accompanies crisis’s direct and immediate conse-
quences. The fundamental goal of crisis manager is to shorten the period of onset of the
crisis because it can go longer and create more damages. The closure of this stage can-
not be determined as the time may extend or may prematurely declare. (Seeger et al.
2003: 91–92.)
2.2.5. Rescue and salvage
Rescue and salvage stage begins when the collapse of accepted beliefs and its damages
are fully recognized. This is the time to initiate rapid recovery and rescue steps for the
adjustments of the situation. For this reason, organizations activate their crisis plan to
mitigate the damages and manage the crisis strategically. Moreover, efforts are required
to rescue the assets and threatened individuals—facilitate families of deceased, recover
bodies, rescue injured people and provide proper medical treatment, protection to prop-
erty/life and assess the level of damage etc.
24
To achieve the goal of rescue and salvage stage, high level of coordination between
organization and outside agency is required. Unfortunately, due to the crisis, communi-
cation channels may have disrupted and cannot fully support the coordinating parties in
the rescue operation. However, the importance of prearranging communication channels
–hotline or phone trees is highly appreciated in this grave situation. (Seeger et al. 2003:
92.)
2.2.6. Full cultural readjustment
The ultimate objective of the final stage VI is to readjust the full cultural environment
according to new understandings to avoid the occurrence of the similar past events. It
includes the readjustments in beliefs of the world, its avoidance norms and hazards.
This is essential to make them compatible with new perceptions. During this stage, scru-
tiny process about blame, reason, the responsibility for the events are discussed and
some outside agencies officially perform this process to identify the network of events
involved during the crisis. Different critical issues, for instance, image-restoration, legal
process, legitimacy, blame and responsibility are addressed at this stage.
In Turner’s viewpoint, the failure of foresight is the recurring process, where the last
stage VI leads to the start of normal activities of the organization—full readjustment of
cultural beliefs, consequently refer to stage I. Turner proposed that onset of crisis does
not happen until the third stage. Additionally, an extended period of time is required for
the incubation stage. (Seeger et al. 2003: 92–93.)
2.3. Mitroff’s five stages of crisis management
The most comprehensive model of crisis management proposed by the renowned pro-
fessor often called the father of modern crisis management Ian I. Mitroff. The model
consists of five stages of crisis management: (1) signal detection, (2) preven-
tion/preparedness, (3) containment, (4) recovery, and (5) learning. In this model, as
shown in (figure 1) the first two stages are considered as the proactive approach to crisis
25
management while last three comes under the heading of the reactive approach of crisis
management. Proactive approach examines the organization’s preparation to experience
crisis while reactive approach deals with the actions taken by the organization after the
occurrence of the crisis. (Penuel et al. 2013: 628.)
____________________________________________________________________
Proactive crisis management crisis Reactive crisis management
Signal Damage
Detection Preparation containment Recovery
Learning
Interactive crisis management
______________________________________________________________________
Figure 1. Five-phase crisis management model.
Source: (Seeger, M. W., Ellnow, T. L., & Ulmer, R. R., 2003: 93.)
Figure 1. presents the development of stages under major three headings of proactive
CM, crisis and reactive CM approach. Each stage contributes to another but in some
cases, however, as shown in (figure 1) where organization learns from previous experi-
ence may tackle the situation and prevent crisis to happen in time, this can explicitly be
seen by the preparation to learning indication.
2.3.1. Origin of the model
“Comprehensive emergency management model” of crisis management model is the
foundation of Mitroff’s five stages model, which is the older and widely cited model in
crisis management. Mitroff modified the older model PPRR (prevention, preparedness,
recovery, response) or MPRR (mitigation replaced with prevention/preparedness) and
proposed a five-stage model with a slight change of addition of two more stages called
signal detection and learning by combining first two prevention and preparedness into
one. Mitroff identified the need for a mechanism to detect the crisis before it reveals
fully in an organization. Additionally, to secure the organization from future crisis based
26
on a lesson learned from the previous crisis is the most important aspect of Mitroff’s
model. (Penuel et al. 2013: 628.)
2.3.2. Signal detection
Mitroff proclaims that long before the real crisis occurs, organizations have the
opportunity to prevent it by taking serious actions against some perpetual and tenacious
early warning signals. Though, the opportunity to prevent crisis may sometime overlook
or underestimated by incredulous people. These early warning signals that notify the
evolving crisis are termed differently in generic management literature as weak signals,
early indicators, wild cards, emerging issues and early warnings. In the last decade as
reported by the Institute of crisis management that about quarter of crisis faced by the
world resulted in a sudden crisis, though remaining were categorized as a smouldering
crisis, unfolded from ignored or undetected warning signals.
The core activity of crisis management team during detection stage is to identify and
detached the signals that warn the emerging crisis from normal signals in a daily routine
operation of an organization. For this task, the organization needs to develop a detec-
tion network team consists of technical and human detectors. Technical detectors may
comprise of machines or devices that can monitor activities to detect any variation
found in the normal operation of an organization. External or internal human detectors
may assign to monitor and transmit data to organization’s decision-making departments.
It is also important to check the reliability and validity of both detectors on regular ba-
sis. An appropriate communication channel must support the detector’s network to
transmit signals to decision making department and the senior level management.
Sometimes signals are not interpreted correctly due to vague, weak or partial signals but
the greatest challenge of this stage is to interpret the signals accurately and inform the
decision-making department and top management in time about any variation against
the normal operational activities of the organization. (Penuel et al. 2013: 628–629.)
27
2.3.3. Prevention and preparedness
In the model PPRR (Prevention, preparedness, recovery, response), prevention and pre-
paredness were considered to be two separate activities, but in Mitroff’s five-stage
model, they are combined together within one stage of the model. According to this, an
organization can be crisis-prone or crisis prepared, practically it is not possible for the
management to prepare for all crisis through planning. However, crisis prepared organi-
zation can well manage to preclude the crisis completely by the systematic planning of
personnel, resources, actions and decisions. The decisive role of crisis manager is chal-
lenging in preparedness stage to consider each possible or impossible assumptions to
confront the dreadful scenario. For this reason, it is advisable to overreact than underre-
act against the possible threats to avoid any minimal loop for damage entrance.
Any possible crisis is usually managed on the basis of 4C’s analysis include causes,
consequences, cautions, and coping. Where causes are the originator of the crisis and
reason for immediate failure, consequences are the immediate result of causes and con-
tain long-term impact, cautions are measures to recover and minimize the damage and
coping is to respond against already occurred crisis.
Another important aspect of this stage, the scrutiny of management plan—testing and
exercising, which usually ignored, include three types of exercises, for instance, tab-
letop exercise, functional exercise, and full-scale simulations. The purpose of the first
exercise in the execution of management plan is to introduce the senior management
staff with their role and responsibilities. Another functional exercise is more complex in
nature than table-top exercise because it includes the real-time execution of the plan.
The last exercise as the title shows full-scale simulation involves several agencies with
practical players. These exercises determine the effectiveness of planning, coordination
between various agencies in uncertain situation and arrangement of requisite training
programs for future improvement. (Penuel et al. 2013: 629–630.)
28
2.3.4. Damage containment
The aim of crisis management during the stage of damage containment is not only to
control the damage occurred but also lessen any further escalation of the crisis. The in-
tensity and impact of the crisis can mitigate by meddling the source of crisis and to
safeguard the critical assets and infrastructure. There is, however, a further point to
consider that the management may not have time to prepare a plan in a quickly spread-
ing crisis milieu, therefore it is significant to have a well-organized crisis management
plan beforehand.
Public, media and other external factors may apprehend crisis situation differently,
damage containment stage, therefore, involved communication strategies which cannot
only protect the organization’s reputation during the crisis but also influence the stake-
holders’ perception in the right direction. In another case, improper communication
strategies may result in unbearable organizational financial and reputational loss.
(Penuel et al. 2013: 630.)
2.3.5. Recovery
Recovery refers to the period, in which organizations try to run their business normally
amid the crisis. Crisis managers perform multiple tasks during this stage, to recover the
damages caused by the crisis as well as handle external stakeholders along with internal
operations. (Seeger, Ellnow, & Ulmer, 2003: 96.)
2.3.6. Learning
Learning is the final stage in Mitroff’s five stages of crisis management. The learning
stage analyzes the events ensued from the earlier stages to improve the shortcoming and
prepare for the future crisis. It is highly appreciated to learn better about the misdeeds
and undergo the review and critique process without playing any blame game with spe-
cific group or department. (Seeger et al. 2003: 96.)
29
2.4. Coombs three-stages approach
Coombs defines crisis as a threat to operational activities, if not solved properly on time,
the impact could be very severe on organizations, stakeholders and on the whole indus-
try. These threats resulted from the crisis are categorized in three forms (1) public safety
(2) monetary loss, and (3) repute loss. During the phase of the crisis, some of these in-
terrelated threats can harm the organizations as severely as they can take the lives of
people and damage the organizational reputation very badly to demolish them. Coombs
classifies three crisis management phases which can lessen or avoid the damages caused
by crisis namely pre-crisis, crisis, and post-crisis phases. In pre-crisis phase, the funda-
mental step in response to face the crisis is to get prepared and prevent an upcoming
crisis. In second phase organization experiences the prevailing crisis and give a
response. The last phase deals with the fulfilment of the commitments and engages with
the preparation for the next crisis along with follow-up information. (Coombs W.T,
2007: 1–2.)
2.4.1. Pre-crisis phase
According to Coombs, the first phase deals with the prevention of crisis, in which most
risks can be eliminated and may reduce the chances to encounter with the crisis. The
prevention of crisis involves crisis management plan, comprise of team selection and
trained personnel, some exercises to test the crisis management plan, and crisis man-
agement team. Coombs (2007) and Barton (2001) report that every organization can
well manage a crisis if they follow the four basic steps (1) an annually updated crisis
management plan (2) nominated crisis management team (3) evaluate the team and
plans annually, and (4) pre-draft crisis messages.
Crisis management plan includes pre-assigned tasks of crisis management team, which
can save the time and energy of the organization to tackle in crucial time by collecting
some useful information before the crisis happen. This plan can prepare the organization
to encounter quickly in the crisis response phase through documentation, forms and
information.
30
Barton recognizes the basic members of crisis team as public relation, investors, securi-
ty, investment, legal, operations and human resources. It is notified by Augustine that
the crisis team and plan must have been tested annually if not the existence of the un-
tested team and plan would be useless.
When crisis strikes any organization, it is very prolific for the reputation of the organi-
zation to inform the world through their own spokespersons. Before the crisis news hit
the headlines by rumours, spokespersons should immediately inform the media, news-
paper, and internet about the real situation and accurate information about the level of
crisis. To deal with media is vital in crisis management plan to secure the position and
goodwill of the company. In this regard, the role of public relations is important in the
preparation for spokespersons’ dealing with media and newspaper.
Coombs reports that pre-draft messages can be prepared by crisis managers to use in the
period of crisis. These messages include statements of top management, news releases,
templates and dark websites. The practicality of these pre-draft messages can be ascer-
tained in a crisis phase when without wasting time in preparation of the templates, the
only requirement is to insert the information into ready templates and websites. Coombs
(2007: 2–4.)
2.4.2. Crisis response
The instant reaction of the management, when crisis strikes the organization is called
crisis response. In this phase, the role of public relations is crucial in message prepara-
tion that can send to the public. Several types of research have been done in the crisis
response which divides it into two segments. (1) Initial response (2) reputational repair
and behavioural intentions.
Coombs claims that the very first hour when the crisis hit the organization is crucial for
the management. In this regard, along with the appreciation of pre-draft messages and
templates, the story of the organization’s side is essential to be disclosed to the media,
newspapers, stakeholders and public. There should not be any vacuum created by man-
31
agement in delay to tell their part of the story to be filled by rumours, however, man-
agement must be quick, accurate and consistent in their disclosure of the crisis news. A
quick response reflects that the company’s situation is under control (Carney and Jorden
1993: 34–35). In contrast to slow response, a quick and initial response maintain the
creditability of the organization. In crisis communication, the strategy of thunder-
stealing is significant, organization discloses their weaknesses or negative information
quickly in time before the other parties for instance media or competitors get the benefit
of the period of delay response (Arpan & Roskos- Ewoldsen 2005: 426–427).
Public relation is involved in the training of spokesperson to answer the media, public
and stakeholders in crisis response rather act as a representative. Spokespersons are not
necessarily being the only one person who is answerable to the entire world to provide
the information relating to the crisis but may include other personnel from various de-
partments like security, legal, finance and human resource depending on the nature of
the crisis. In addition to the quick release of crisis information, accuracy and consisten-
cy are also important especially in case of public safety. Delay and inconsistent provi-
sion of information can not only harm the reputation of the organization but also it can
serve as a stigma for injury or death of people. It is also recommended by crisis experts
that they should express some sympathy and concern for the victims. Victims are the
people who suffer and victimize financially, physically, and morally from the crisis.
(Kellerman 2006: 74–75) stipulates that expression can help in lessening the reputation-
al and monetary loss of the organization. To reinforce the idea of expression (Cohen
1999: 1068–1069) founds after examined the legal cases that initial expression of con-
cerns by the offender can result in a reduction of claims made against them in the period
of crisis. Unlike these agreements with an open expression of concerns, (Tylor, 1997)
limits the scope of expression, which can be used negatively by the lawyers to inflict the
guilt acceptance on organizations. Therefore, expression of concerns may not be made
by several crisis managers that would lessen the effect on public and detriment to the
organization.
The Business Roundtable (2002) and Corporate Leadership Council (2003) state that
employees are also needed to know what has happened to the organization, what is a
32
role to perform and what would happen to them in future resulting in a crisis. The
organization should demonstrate the same zeal of concern with employees as they ex-
press for the victims and their families. At last, in case of severe injury or death caused
by the crisis, the organization needs to design some traumatic and stress counselling for
the victims, their families and employees.
Reputational repair can be used in both, crisis response phase and post-crisis phase. Or
depending on the situation it may begin in crisis response phase and carry on to post-
crisis phase. (Bill Benoit: 1995; 1997) analyzed and amalgamated many different re-
search traditions, which shared the same concerns to achieve reputational repair strate-
gies. Coombs (2007) incorporates the work of Benoit to present a “Master list of reputa-
tional repair strategies”. Many types of research have been made to combine reputation-
al strategies with other strategies. Therefore, the most common theory has been com-
bined with reputational strategy is known as attribution theory. According to the attribu-
tion theory people try to explain the reasons, for instance why a crisis happened and
who is responsible for that crisis. This attribution theory is used to relate to reputational
repair strategies when the crisis is sudden and have a negative impact. Coombs (2007:
4–9.)
2.4.3. Post-crisis phase
Coombs states that post-crisis phase is the period in which organization starts its busi-
ness in a routine with little attention of management on the crisis to update its stake-
holders, public and media. The update information comprises of follow-up communica-
tion and fulfilment of promises if made in the period of crisis. These promises may in-
clude the informational promises and recovery process, corrective actions, and even
investigation of the crisis. This information can be delivered to employees and public
through an intranet, phone calls, voice messages, emails, text messages and personal
emails. Coombs (2007: 9–10.)
The crisis should be a learning process, for this purpose organizations need to evaluate
their crisis management strategies by assigning a crisis evaluation team other than crisis
management team; who can identify and improve the crisis management exercises and
33
work on crisis prevention, preparedness and response processes. Lessons learned from
previous crisis help organizations to integrate measures in pre-crisis and response stages
to enhance crisis management aptitudes.
Any reputational damage during a crisis can also address in this phase. It is seen that
communication strategies used during crisis response may dilute most of the reputation-
al damage, however, it requires significant repair efforts against the strong reputational
threat, moreover, it is challenging when organizations have a history of similar crisis
and prior reputational damages.
In this phase of post-crisis, any commitments made during crisis response phase also
need to be fulfilled such as follow up information and victims’ compensations. Any
negligence to commitments can intensify the crisis-repair and recovery process. For
instance, failure in victims’ compensation adversely affects the organization’s reputa-
tion.
2.5. Mitroff & Anagos five components framework and assuming responsibility
In the book, “Managing crisis before they happen: what every executive & manager
needs to know about crisis management”, (Mitroff & Anagos, October 2000) provide
insight of crisis management and advice to prepare for more than one crisis at a time.
Unlike natural disasters, the crisis is the fault of human, or man-made disasters. These
disasters are inevitable, nonetheless can be lessened through crisis management tools.
No organizations can secure itself from affecting crisis in a complex system, however,
the effect can be minimized through either anticipation of the crisis in time or tackle
them after it happens.
Mitroff & Anagos (2000) classify the crisis management framework into five compo-
nents such as (1) types of crisis/risks (2) mechanism (3) system (4) stakeholders, and (5)
scenarios.
34
2.5.1. Types of crisis/risk
Following (Table 3.) of seven major crisis/risks, covers nearly all kinds of expected
mishaps, accidents, and disasters. An organization may be confronted more than one of
the following crisis as shown in (Table 3.) at one time, therefore if possible organiza-
tions need to prepare one crisis under each type of disaster/risk/crisis in crisis manage-
ment. Mitroff & Anagos (2000: 32.)
Table 3. Types of risks/crisis.
Econom-
ics
Informational Physical Human
Re-
source
Reputational Psychopathic
Acts
Natural
Disasters
Labor
strikes
Loss of proprie-
tary & confiden-
tial information
Loss of key
equipment,
plants &
material
supplies
Loss of
key exec-
utives
Slander Product tam-
pering
Earthquake
Labor
unrest
False information Breakdowns
of key
equipment,
plants etc.
Loss of key
personnel
Gossip Kidnapping Fire
Labor
shortage
Tampering with
computer records
Loss of key
facilities
Rise in
absentee-
ism
Sick jokes Hostage taking Floods
Market
crash
Loss of key com-
puter information
with regard to
customers, suppli-
ers.
Major plant
disruption
Rise in
vandalism
& acci-
dents
Rumors Terrorism Explosions
Work-
place
violence
Damage to
corporate repu-
tation
Workplace
violence
Typhoons
Tampering with
corporate logos
Hurricanes
Source: Mitroff & Anagos (2000: 34–35)
35
2.5.2. Mechanism
After describing types of crisis/risks Mitroff & Anagos (2000) propose the mechanism
to deal with the crisis before they hit the organization. This mechanism helps the organ-
ization design, learn from, and react to, sense and to anticipate the organizational proce-
dures in handling the major crisis.
No crisis can hit the organization without sending pre-warning signals, however, if the
organization is well-equipped with an efficient mechanism to detect the signal, can ei-
ther recover/minimize the damage before they happen or eliminate the crisis completely
by controlling the situation. It is advisable to control the situation by making the effi-
cient crisis management to protect the organization before crisis inflicted the entire sys-
tem. Though in most cases, an early warning signal could not hear/ notice by manage-
ment and employees on time and later ignored signals transformed into a severe crisis in
future. On the contrary, if the warning signals are noticed by the management, the signal
transmission would be the next step. It is vital to know, when and whom the signals
should be conveyed. The circumstances may be reversed if signals are not handled cor-
rectly or transmitted in delay. The crisis may happen, in some cases, even if the organi-
zations are well prepared their signal detection mechanism. In this case, damage con-
tainment mechanism is used, the process of retaining the crisis for a period to secure it
from spreading. Another two important mechanisms are also worthwhile here to dis-
cuss, (1) post-mortem (2) near-misses. When organizations learn and re-design their
systems in the result of crisis for future crisis management, this is called post-mortem of
crisis. Mitroff & Anagos (2000: 39–42.)
2.5.3. Organizational system
Mitroff & Anagos (2001) present an onion model (Figure 2.) consists of various inter-
connected layers, in a complex organizational system. In this model technology covers
the outer layer, then comes organizational structure, human factors, organizational cul-
ture, and finally the core consists of top management. These sections are interconnected
with each other, like technology (computer) needs human factor to run the program, and
36
top management is responsible for smooth running of the entire system. In crisis man-
agement, organizational culture is the most critical component of the system. When we
further divide the organizational culture, a defence mechanism is a key component in
which like people organizations try to pose responsibility of damage to other people. To
put it differently, organizations’ try to deny the liabilities (vulnerabilities) of a major
crisis. These defence mechanisms have many forms including denial, disavowal, ex-
cuse, justifications etc. Mitroff & Anagos (2000: 42). (As mentioned in Coombs 2007
master list of reputation repair strategies).
Figure 2. The Onion Model: The layers of an organization.
Source. Mitroff & Anagos (2000: 43)
2.5.4. Stakeholders
Stakeholders are internal and external parties, who are associated with the actions of
organizations. From management to employees, customers to suppliers, media to logis-
tics and several external agencies may include under the heading of stakeholders. The
broad category of stakeholders may influence the crisis situation; therefore, it is perti-
nent to develop a good relationship with organizational stakeholders in crisis manage-
ment. Mitroff & Anagos (2000: 48.)
Top Management
Organizational Culture
Human Factors
Organizational Structure
Technology
37
2.5.5. Scenarios
The last component of crisis management framework is known as scenarios. When an
organization went through all above discussed four components i-e, types of crisis, or-
ganizational system, mechanism, and stakeholders of crisis management; it is time to
prepare some scenarios based on two approaches. The first approach called best-case
scenarios, in which organizations can generally anticipate a crisis in advance or in other
words, they are well-equipped to the response against the crisis. On the contrary, when
organizations confronted some sort of crisis, for which they are not prepared, are called
worst-case scenarios. Mitroff & Anagos (2000: 48–49.)
2.5.6. Assuming responsibility
Mitroff & Anagos (2000) describe another most prominent issue in crisis management
is to assume responsibility. The crisis may occur either due to an individual’s fault or
the organizational negligence to detect the signals. Whatever the case may be, the ulti-
mate step for an organization is to assume full responsibility for damage and express the
concerns of the victims. In this situation, a company echoes as a villain, who is respon-
sible for making harm to others. Out of various categories of the villain, the repentant
villain is the one who accepts the full responsibility for damage and promises to correct
the situation and take the precautionary measures to prevent a future crisis. Another
category of the villain is a damn villain, the one who not only harm the organization
knowingly but also refuse to accept the responsibility. Mitroff calls them “damningly
damnable villains” because they continuously engage in denial and stonewalling state,
after creating a crisis on the first stage. This action of damn villain creates chain-
reaction of further crisis to happen. Mitroff & Anagos (2000: 83–85.)
2.6. Summary
Chapter II presented a comprehensive model framework for crisis management based
on previous research studies regarding crisis life cycles and staged approaches. This
analysis instigated with Steven Fink’s crisis life cycle, known as the earliest model
38
which primarily describes the consecutive stages of crisis life cycle based on organiza-
tional demands. This model helps in both situation crisis response and crisis planning,
moreover widely applicable in crisis communication. To describe stages of the crisis,
Fink used human illness process in which time is indefinite. Fink’s model of disease
analogy comprises of four stages: Prodromal, Acute, Chronic and Crisis Resolution
Stage. He took crisis as a turning point in both situations, whether organization handles
the situation or escalate in severity.
Turner’s model consists of six stages namely; Normal Starting Point, Crisis incubation
period, precipitating event, the onset of the crisis, rescue and salvage, and full cultural
re-adjustment. In Turner’s point of view, a crisis can easily be eliminated during normal
and routine operation with little efforts, otherwise, ignorance and failure of threatening
cues can lead to huge crisis and this is what he called the failure of foresight. Turner’s
model is mainly focused on complex organizations with social processes to develop
social norms and practices. He considered disasters unconventionally, to name them as
cultural collapse, in which accurately carrying out social norms are intolerable. There-
fore, he took the crisis in a form and nature of social orders and disorders.
The most comprehensive model discussed above in crisis life cycle was presented by
well-known organizational theorist Ian I. Mitroff, often called the father of modern cri-
sis management. His model was a modified form of the older model PPRR (Prevention,
preparation, recovery and response) or MPRR (mitigation, preparation, recovery and
response). Mitroff proposed a five stages crisis management model which consists of;
signal detection, preparedness/prevention, containment, recovery and learning. First two
stages come under the pro-active approach to prepare organizations for taking measures
against any upcoming crisis, while other three deals with reaction to crisis when it al-
ready happens, are label as a reactive approach.
Three stage crisis approach proposed by W. Timothy Coombs consist of pre-crisis, cri-
sis response and post-crisis. He labels crisis as the threat of operational activities in
form of public safety risk, reputational and monetary losses of stakeholders. This model
can help the organizations to lessen the damage in every phase before, during and after
39
the crisis. Following (Table. 4) summarize the four crisis management models above
described in detail.
Table 4. Crisis management activities in four different crisis models.
Five components framework of crisis management is designed to deal with more than
one crisis at a time. These are useful for man-made disasters, unlike a natural disaster,
these crises are inevitable in complex organizational systems. The framework consists
of five components namely; types of crisis, mechanism, system, stakeholders and sce-
narios. Crisis management is the study to think, what is unthinkable for companies,
stakeholders, employees and managers. In fact, it is an exercise of creative thinking,
which secure companies from dwindling into the worst situations.
Fink’s Crisis Life
Cycle
Turner’s six stages of
failure in foresight
Mitroff’s five stages
of crisis management
Coombs Three-Stage
Approach
Prodromal Stage
Normal Operations Signal detection
Pre-Crisis Phase Crisis incubation period Prevention and Pre-
paredness
Precipitating event
Acute Stage Onset of crisis Damage Containment
Crisis Response
Chronic Stage Rescue and Salvage Recovery
Crisis Resolution
Stage
Full cultural readjust-
ment Learning Post-Crisis Phase
40
3. ARGUMENTATIVE STRATEGY
To provide a conceptual framework for crisis management in organizations, four differ-
ent research aspects have been identified in Section 1.5 after a thorough literature re-
view. In this Chapter, the methodology undertaken to investigate the research questions
is briefly covered.
According to the Merriam-Webster dictionary, “a research is a studious inquiry or exami-
nation; especially: investigation or experimentation aimed at the discovery and interpretation of
facts, revision of accepted theories or laws in the light of new facts or practical application of
such new or revised theories or laws”. Or in simple words, a collection of information
about a subject is called research.
According to the Creswell, “Research is a process of steps used to collect and analyze infor-
mation to increase our understanding of a topic or issue”. It consists of three steps: “Pose a
question, collect data to answer the question, and present an answer to the question.” (Cre-
swell: 2012.)
Whereas, the methodology is a strategy of conducting research and defines methods
used in a specific research. Methods explain the mode of data collections and infor-
mation analysis. There are several types of research, to name a few are descriptive vs.
analytical, applied vs. fundamental, qualitative vs. quantitative and empirical vs. con-
ceptual research. It was believed and taught for ages that a large cannonball fell more
quickly than small ones, but it was proved logically inconsistent by Galileo, an empiri-
cist. He had not only proved some illogical theories to be just wrong but also investigat-
ed theories to provide basics for new models. It is undoubtedly factual that empirical
research based on experiments and logic, but conceptual research has its own standings
in the field of research. In this kind of research, theory and concept are focused that ex-
plains the main phenomena of study. It does not include experiments but uses observa-
tions with brains. Conceptual research focuses on the philosophy and social issues more
aptly. It is appropriate in this field of study because it breaks down the concepts into
integral parts to gain a better understanding of philosophical issues. It is said that you
are in an ideal situation when you have a well employed theoretical model.
41
Keeping in view the cosmic significance of the crisis management and diverse litera-
ture, the argumentative strategy is considered in order to evaluate the research questions
of this thesis. The approach is essentially investigating a topic; collect, generate, and
evaluate evidence; and establish a position on the topic in a concise manner. Since it is a
conceptual research, so I had emphasised on an extensive literature review to shed light
on important aspects of crisis management and strategies that exist in providing relief to
the organization, especially, public sector organizations. This approach is also highly
correlated to historicism that emphasizes on the intellectual history for understanding
the crucial aspects of the subject by finding, using, interpreting, correlating information
and focusing on past events (Osifo: 2016). I mainly searched through electronic media,
online/printed books, scientific journals and reports, and business reviews. Therefore, I
used various keywords such as crisis management, leadership, crisis models, and crisis
types, critical factors of crisis, to search for the available material on crisis management
in organizations. Before framing my research questions, I made an all-out effort to
search for the appropriate evidence to support my research topic and model a frame-
work for crisis lifecycle. As it is a vast subject with the scattered material, most of the
contributions were made during 1980’s and provided me with an opportunity to study
this interesting topic.
I addressed the four critical research questions in Chapter 4., which were structured on
the basis of research statement and argues that the organization can minimize the
damages occur due to crisis (man-made/disaster) by considering the crisis management
activities, meanwhile it is important to note that no organization is crisis-proof in
modern society/era. To support my argumentative strategy I, however, defined the
nature and causes of crisis and difference between public-private organization first to
introduce the topic of discussion. Secondly, Leadership and critical factors are
influential in crisis management discourse. And lastly, to make my arguments
comprehensive, easy to grasp and visually understandable I used the graphical
representation to address the fourth question of real-life cases of three public-private
organizations. The XY line graph had been used to show the progression of the crisis
events (two or more points). Where crisis cause (or sometimes warning signal), action/
response, crisis impact and safety levels are used as multiple dependent variables (Y-
42
axis) with one independent variable of time/weeks/days (X-axis). Additionally, it is im-
portant to inform the reader that the independent variable (time, X-axis) is a definite
variable used in all cases, while Y-axis does not use for the accuracy of data but to
shows the progressions of known variables.
43
4. MAIN ARGUMENTS
In this chapter, I support my arguments by addressing the research questions identified
in section 1.5. The structure of this chapter comprised of four research questions based
on argumentative approach. The chapter starts by differentiating the two types of organ-
izations (public/private) to discuss the nature of the crisis exist in public organization,
moreover to define the causes that trigger crisis to happens. In second research question,
the most critical factors are identified and argued that how they are crucial in dealing
with organizational crisis management. Leadership is the mainstay of any organization,
however, in the third question, the characteristics of a good leader have been discussed
along with the situation where management use damage containment strategies to keep
the loss minimal arise due to key manager’s resignation. It is also argued that sometimes
top executive does not show flexibility in their decision that makes the working envi-
ronment more challenging. The last question analyzed the three real-life cases to pro-
vide the suitable contingency management strategies. The graphical representation of
the real cases makes easy for the reader to grasp the crisis events and differentiate the
importance of crisis management based on crisis size and scale in an organization (pub-
lic/private).
4.1. Research question # 1: What is the nature of the crisis that exists in public
organization.
4.1.1. Sub-question: How public organizations are different from other types of organ-
izations.
Nobody can ignore the fact that the technological advancement and modern society in-
tersect the world for the betterment and convenience, but it also witnesses some increas-
ingly damaging facts. This interconnected society brings more hazards and threats along
with advancement and become more vulnerable and exposed to manage risks. Conse-
quently, threats may spread increasingly and quickly through spillovers and amplifier
effects beyond boundaries. To name a few here are new viruses, terrorism, flood, tsu-
nami, nuclear explosions, earthquakes and fatal diseases. These threats are new in na-
44
ture, they are unprecedented, unexpectedly large and transboundary and characterized as
“global shocks” — “Rapid onset event with severely disruptive consequences covering at least
two continents.” (Baubion, C: 2013.)
The cascading risks which spread across the global system become active threats, and
they may escalate in shape of health, climate, social and monetary crisis. In this global
shock era when new threats are exposed and vulnerable, crisis management has become
one of the keys evaluated issues for the society, organizations and governments. Keep-
ing in view the variety of different stakeholders’ interest, logic, expectations and priori-
ties, organizations need to adopt relevant crisis management approaches.
Furthermore, revolutionary crisis management approaches also trigger the need to re-
form the operations of various organizations. This change highlighted the vague cleav-
age between the functions, interests and strategies of private and public organizations.
To perform the social services, for instance, public organizations need the collaboration
of private and nonprofit organizations. Where funding and strategic planning is per-
formed by public and private sectors and voluntary services are performed by nonprofit
organizations. Therefore, it witnesses the agencies of all sectors in society and similarity
in respect of functions, forms, tasks, and risks to the people, property and processes
(Drennan, McConnell, & Stark, 2015: 8.)
These collaborations may reflect the similarity in functions, management and services;
some of the profound variances still exist to make the private public sectors distinctions.
At first, profit-making is the main objective of the private organization, whereas public
sectors are service providers. Secondly, the stakeholders are different in public and pri-
vate organizations. Finally, the importance of the political and social environment for
both sectors are different. To make it simpler, the public sector is responsible for
providing services to the public, target community/group in general, eventually, they are
risk-averse than risk takers. It is startling but true that many public-sector organizations
have very fewer chances of bankruptcy and liquidation. Public pay taxes so they be-
come shareholders by virtue and organizations are accountable for social and political
scrutiny. On the contrary, the private sector is profit-seeking financial and operational
45
organizations with limited shareholders. There is no fear of political reforms and public
scrutiny for the private sector; therefore, they are the risk takers in technological ad-
vancement and they face a big market competition. (Drennan et al. 2015: 8–9.)
4.1.2. Sub-question: What is the nature of the crisis and what causes them to arise in
public organizations.
Anything that shatters the peace and order of society comes under the heading of crisis;
personal conflict, workplace distress, economic deficiency, production flaws, and mar-
ket decline. Furthermore, nobody on earth is hoarded in this modern society, which is
exposed and vulnerable to hazards and natural disaster, for instance, the upsurge of in-
ternational terrorism, tsunami, earthquake, fire, and nuclear attacks. To lessen the im-
pact, to avert the hazard, even for the clarification about happenings and precautionary
measures for future preventions, people look at their leaders, public managers, politi-
cians, elected members, and presidents in times of crisis. It is crisis management that
can make the difference between failure and success of the entire system and answera-
ble to the question of death and life of citizens, organizations, and society as a whole. It
is not an easy task to confront an unexpectedly large, complex, unprecedented, and
transboundary crisis; however, many stakeholders are involved in crisis management:
that is media scrutiny to evaluate actions of public leaders and managers, cooperation of
both public and private sectors, supervision of policymakers in operations, communica-
tion and timely response to shareholders, customers, and media.
“A situation that threatens the high-priority goals of the decision-making unit, restricts
the amount of time available before the decision is transformed, and surprises the mem-
bers of the decision-making unit by its occurrence.”
(Hermann 1972: 13.)
Here to elaborate the nature of the crisis, we have three key components – namely (1)
threating situation, (2) time restriction for actions/decisions (urgency), and (3) element
of surprise and uncertainty.
46
1. Threating situation
When there is a danger of life and property of the citizens, threats are obvious. For in-
stance, people’s reservations about security issues in public places when it already has
some recent terrorist attack. Similarly, severe threats might possible when there is lack
of public confidence in aeroplane safety systems. To make it simpler by comparing a
large-scale natural disaster and government’s inability to cover the shortfall of electrici-
ty in commercial areas. Apparently life-threatening natural disaster is more severe in
form of threats, but latter cascading threats resulted from electricity shortfall contributes
towards ‘crisis’ label: that is in shape of liquidation of organizations and industries suc-
ceeding shortage of product/market supply ultimately bring the burden of imports on the
government level. Hence, crisis analysts often confer threats on the ground of political
and operational level. For instance, a threat to life, property, public security/safety and
lack of governments’ confidence. (Drennan et al. 2015: 15–16.)
2. Time restriction for actions/decision (urgency)
Naturally, when there is a question of societal unrest and saving people lives: society,
people, media and other stakeholders look at the government to hold an ultimate respon-
sibility in the situation of high-level threats and uncertainty. Governments’ unique role
is the ultimate reason behind this narrative; they can manage and take quick decisions in
time, they have command of relevant resources, capable to direct machinery due to leg-
islative and political authority. (Drennan et al. 2015: 16.)
3. The element of surprise and uncertainty
Threats ascend with several queries and uncertainty; when and how did it happen, it was
an accident or an attack, how many injuries and causalities, damage to peo-
ple/place/equipment/building, one-off event or cascading impact (chain event). Clearly,
severe threats pose overwhelming psychological and physical pressure on public man-
agers with apparent surprises: disrupt normal operational activities, disturb the pace and
functional life of organizations, society and other relevant stakeholders. Therefore, a
47
crisis brings uncertainty about its scope, causes, damage, nature, severity, impact and
lack of evidence. (Drennan et al. 2015: 16.)
How to deal with the crisis at an early stage of its occurrence to get secure from the
worst ending, is the question to provide basic guidelines for public managers and
policymakers. From this perception, therefore, we need to address two aspects: first to
find the cause of crisis occurrence and second to find the answer for why do human er-
ror repeatedly occur that help cause crisis.
Generally, public organizations confronted with two types of crisis: slow-paced crisis
and fast-paced crisis. Some unheeded issues transformed into a crisis that basically aris-
es within the organization and its policy sector. The second fast-paced crisis is typically
labelled as natural disasters. These high-speed triggering events such as flood, earth-
quake and tsunami are present as a threat in the community. To provide more detail
about causes of the crisis in public organizations, we need to address briefly the follow-
ing critical issues. (Drennan et al. 2015: 55–56.)
• Human errors
• Technological failures
• Government behaviour
• Management system failure
Human errors
‘To err is human’ is a proverbial phrase: to the best of its knowledge and information,
the human makes decisions and take actions. Despite good intentions, errors do occur;
the reasons include misjudgments, lack of information, training, tiredness or careless-
ness and insufficient supervisions. Along with unintentional human mistakes; deliberate
errors, mistakes and above all fraud, as can be expected, prevailed in the working envi-
ronment that cause the severe crisis to the public organizations. (Drennan et al. 2015:
56.)
48
Technological failures
Disruption in service continuity and physical calamities are inevitable in technological
failure. Fail-safe assurance is prerequisite in life-critical environments; like in chemical
factories, railways and aeroplane systems, aircraft flight control, weapons, nuclear sys-
tems, and medical devices. In complex technological environments, a minimal break-
down in information or power system, for instance, prevent the operational activities
and efficiently incapacitate the organization. Thus, it is certain to avoid technological
disasters in modern society of e-service. To minimize the severity of the technological
failure, planning is crucial to make sure that human life is most important and others
come later, for instance, equipment, property and service continuity. There are some
shortcomings in a complex technological organization which are based on unplanned
activities combined with inefficient correspondence and pressure to achieve targets, that
sometimes leads towards shortcut and contributes to happen big mistakes. For instance,
in Columbia Space Shuttle Disaster, where mismanagement in the organizational, cul-
tural, social, political and technological system is found for its failure. (Drennan et al.
2015: 58.)
Government system
Government behaviours directly influence the attitude and response of a society that
triggers them to be the cause of crisis occurrence. The public pays taxes, from this per-
spective, therefore, the government is responsible to keep a balance between cost of
public services they provide and the amount citizens pay in shape of taxes. As the public
is one of the influential stakeholders, governments need to make public policies specifi-
cally relating to infrastructure; roads, water issues, railway system, health, school, waste
disposal, and public services in the best interest. It highlights the issue of conflicting
demands relating to increasing safety and services with no extra cost, which contribute
to the varying balance between cost of services and public demands. As a result, failure
in government adequacy for instance, in the new computer system and projects like
railways tracks have inadequate testing and training with minimal available funds.
49
However, government failure to provide adequate infrastructure is a serious factor in
major crisis and accidents. (Drennan et al. 2015: 59.)
Management system failure
No doubt, we live in a blame society, where organizations run under a constant fear of
media scrutiny for failure attribution. Not only deliberate or intentional human errors
are responsible for the organizational crisis, but also inadequate management system;
lack of training, insufficient supervision of staff, lack of guidance, and inefficient strat-
egies are on the list. As Henry Petroski says “You can almost say that a design error is a
human error because, after all, it’s we humans who do the designing.” Inefficient record
keeping, miscommunication between organizational hierarchy, blame games, and igno-
rance of past mistake all contribute to the emergence of crisis situations in organiza-
tions. The organizational model reflects human errors as consequence of management
flaws than the cause of crisis occurrence. Or in other words, human inadequacy is taken
for granted, and errors are perceived as symptoms of concealed conditions already ex-
ists in the entire system. (Drennan et al. 2015: 58.)
4.2. Research-question # 2: Identification of critical factors that plays a signifi-
cant role in dealing with organizational crisis management.
Generally, we take the term ‘crisis’ as an alarming situation, but numerous successful
factors can positively influence the organization in distress situation if dealt with hones-
ty and rationally. Following most prominent critical factors are addressed in dealing
with severe threat/crisis in public organizations.
Robust leadership
The most fundamental factor in response to the crisis, however, is the ability of strong
leadership to communicate with relevant stakeholders and the media in general. The
nominated leading spokespersons and management team must have a clear and con-
sistent coordination under prevailing crisis, therefore, no loophole can be filled with
50
speculations. What is more, the authority to handle and capacity to deal with the crisis is
only the role of strong leadership.
Instant decision-making
Severe threats and crisis can quiver the organization to surprise, therefore, it sometimes
leads top management to unnecessarily stretched silence and eventually delay in right
decisions in right time. This gap can easily undermine workforce approach and break
the confidence over organizations’ stability. Thus, decisions need to be made quickly
with no circumventions. It doesn’t mean that decisions are made in haste; compile
enough facts and figures to present a sound decision promptly is more worthwhile than
delay presentation of perfect decisions.
Prompt and effective actions for victims
Life threating events are more hazardous. It needs special treatments and attracts the
quick attention of media and public reactions. It is, however, easier to play blame
games, but it is morally recognized the duty of organizations to accept the responsibility
and provide immediate aid and announce compensations for the victims. Conversely, it
is more harmful than expected.
Pro-active approaches to elevate environmental effects
In the modern society of technological advancement, as can be expected, danger to life,
property, and equipment is unavoidable. Moreover, a severe menace to the environment
is vulnerable specifically in the safety-critical atmosphere. Not only, to ignore this fact
can severely damaging to organizational reputations but enact heavy financial duties
from national authorities and watchdogs in forms of polluters fines.
Direct communication
To begin the discussion about communication we categorize it in three forms; firstly,
with governments or regulatory authorities, secondly with direct stakeholders, and lastly
with media or press. It is crucial to maintaining drift in communication with these chan-
51
nels to avoid unnecessary speculations and malevolent rumours to fill in communiqué
vacuums. Not only consistent and continuous information flow but the appropriate
channel (agreed beforehand, if possible) is imperative. Most importantly, crisis prevails
swiftly, it is appreciated to avoid information vacuum by assigning a various spokesper-
son to communicate with different channels; as management needs to fix it with no de-
lay. In this context, it is significant to validate the accurate information flow and com-
mon context across the channels precisely.
To keep informed the own staff is as important as communication with other stakehold-
ers; regulatory authorities, media, shareholders. It implies that organizations value their
staff and their support and coordination by conveying them directly with honesty about
the current organizational situation.
In brief, honesty and accuracy is the key to communication; dishonesty and false delib-
erate statement not only illegal but harmful to the reputation in long run and ultimately
permanently damage the organization. stakeholders, for instance, press and media do
their jobs, they also under pressure to present a true picture of incidents. So, keep your
promises and act professionally by committing appointments to concerned stakeholders
than avoiding them in constricted times/schedules.
Clear plans and roles
It is instructed while planning about the crisis, that Noah started creating ark before it
began to rain, therefore, it is advisable to prepare for the upcoming dangerous events
before it strikes for the worst. To equip with pro-active crisis plans and well-defined
personnel’s role and responsibilities is the key to confront the crisis. Additionally, these
strategies should regularly be restructured and include general response to a series of
possible circumstances, these may include;
• Warning system
• Media and adverse image management
• Product recalls
52
• Terrorist events
• Finance and monetary matters
• Open market and regulatory issues
• Industrial problems
The energy employs in scooping out the best possibilities and identification of relevant
issues will enable the organization to manage their resources properly. For this reason,
they need to focus on the pro-active strategies; that is the development of the consistent
framework, identification of assortment and regularly reviewed approaches. To capital-
ize in some of the advisory services, for instance, finance specialist, media handlers
(spokespersons), lawyers, technical specialist, and consultant advisors may seem pru-
dent to prepare for the challenging period, especially in a crisis.
Ensure regular training and rehearsal
The main purpose of having a crisis management team is to perform their role in a time
of crisis. To ensure this perceptive, they must have had the most available opportunities
for rehearsal and proper training. These regular rehearsals and training will enable the
management team and other operational staff to effectively work under one direction
and create a collaboration to focus on essential tasks together. It is practically appreciat-
ed to offer some restrict and more realist scenarios to crisis management team for re-
hearsal and exercise, that can dwell pressure to perform in severity and bounce the light-
hearted behaviours, that needs in real crisis situations. Additionally, in these
manoeuvres, external observers and facilitators may be invited to give feedback, com-
ments and response on performances. It should be noted that the feedback must be posi-
tive and motivating, as these sessions are learning exercises to encourage crisis man-
agement team.
Remember, crisis never comes with appointments, well-trained crisis management team
is not a guarantee to confront the crisis, the main objective is to ensure that how much
machinery in hand would be available when needed. In 7/7 London attacks, it observed
that most of the crisis management teams were unavailable due to vacations or overseas
travels. Under these circumstances, organizations need to prepare their crisis manage-
53
ment in a way to ensure the availability of maximum resources in a time of crisis.
Moreover, it is advisable to employ deputies for each role of crisis management team
and regular rotation of team members are beneficial for its efficiency.
Good stakeholder relationships
Having a good relationship with your stakeholders can guarantee to safeguard from the
crisis, perhaps a crucial statement. Nothing can assure this; however, it witnesses that
key to run a successful business, organizations need to have smooth dealings with their
stakeholders. Not only good relation serves as the cornerstone, but help to maintain a
good reputation in the market.
Generally, stakeholders effected through organizational activities, thus they acquire
some reservations about how business is running, is organization maintain trust, or do
organization have proactive measures to safeguard from risk or crisis. To curtail their
apprehensions about operational activities; organizations involved in crisis management
along with other measures namely business continuity management (BCM). This is the
planning and preparation to guarantee the revival of organizational operational activities
in the reasonably transitory period after a severe natural disaster, man-made incident or
crisis. It includes three key elements namely; resilience, recovery and contingency. UK-
based Continuity Institute well defines the term as “Business continuity management is
a holistic management process that identifies potential impacts that threaten an organi-
zation, and provides a framework for building resilience and the capability for an effec-
tive response that safeguards the interests of its key stakeholders, reputation, brand and
value-creating activities.” By stakeholders, we generally mean customers, workers,
shareholders, suppliers, investors, community and government regulatory authorities.
In brief, these precautionary measures can proactively demonstrate a good business rela-
tionship and maintain well tested and resilience environment to strengthen the stake-
holder trust over organizations.
54
Effective representatives
Another critical factor in crisis management is to convey clear and effective messages to
outsiders; media, regulatory authority, shareholders and public. Generally, it believes
that the most prominent workers in the organizational hierarchy, for instance, CEO is
the right person to clearly deliver organizational messages with the outer world. But this
may not be true, depending on the organizational structure, size and market competition,
you may consider some professional help. There are two options; first hiring a spokes-
person to work on your behalf and second to arrange some training programs to skill
your internal workers for effective communication. Moreover, in the middle of a crisis,
the most challenging situation is to face the press or media mob; to fight a losing battle,
senior managers/executives are required to attain media skills through proper training
sessions.
Finally,… say sorry!
It is important to comprehend the severity of the situation; damage to people, property
and environment. It is not considered bad if the organization accepts the responsibility
and own victims; failure can add adverse reputational pressure by media and other
stakeholders. But some organizations are institutionally incapable to accept the fault and
apology. Saying sorry does not necessarily mean that you are accepting the full respon-
sibility for the disaster, it reflects good gestures towards victims. In addition to the
apology, it is advantageous to announce some compensation to affected people; for in-
stance, financial assistance, free medical treatment, or funeral and counselling expenses.
4.3. Research question # 3: To evaluate the role of organizational leadership in
managing crisis situations.
Leadership is the backbone of an organization. It plays a vital role especially in the time
of crisis to handle the situation wisely, to run the business simultaneously with the cri-
sis, and to control the internal and external stakeholder, i-e., employees, clients, media,
and government.
55
4.3.1. Sub-question: How a good leader reacts to the crisis and control the situation.
A disruptive operational activity; does not emerge to summon the entire team to explain
the situation, which can only add tension in upsetting condition. Instead, a good leader
can alleviate the tension by delegating charge to every responsible manager to prepare
for a subsequent meeting in an hour and present the reasons for triggering event. In this
manner, a leader may not only have a reasonable time to figure out the circumstances
but the command in a chaotic state.
When crisis strikes, it observes that the few hours are critical to respond promptly. A
good leader can response and direct the employees in a timely fashion, some hurried
moves may make people nervous. However, act wisely and quickly can well manage the
situation. Moreover, it is sometimes not easy to control the consecutive events cause by
the crisis; whether they are a man-made or natural crisis. Under this quick happening
moments, everyone seeks for help and expect quick control over the situation. There-
fore, it is assumed that leaders will take command and bring the people and resources to
bear. But it is seldom to have full control over the situation and give quick resolutions
according to people’s expectation.
A good leader should not hesitate to speak about the magnitude of the situation, it does
not mean that it can make people afraid of the alarming situation that offering viable
solutions by keeping in mind the nature and scope of crisis can best highlight the role
and responsibility of a good leader. Additionally, another trait of a good leader is to
keep control over the composure. Crisis changes rapidly, it is its hallmark; so, does the
leaders’ response: first response on the first event may not match the situation later,
leaders’ ability to adapt quickly can lead them to match their strategies according to
varying situations.
Another significant role to perform in a crisis is to provide a clear perspective on its
employees. A leader may not necessarily exercise the deed but can achieve the out-
comes by only direct the response with perspectives by observing the whole probable
circumstances. Furthermore, leaders who maintain perspectives while dealing directly
56
are the ones who explicitly reflect the ability to lead the team and control over the situa-
tion in crisis. (Baldoni, 2011.)
4.3.2. Sub-question: What would be the response strategy, or damage containment
approach if leadership itself falls into crisis.
When leadership in crisis
Shareholders believe that the company’s success based on vice president’s performance:
he is the only reason why the company is doing well, and here his resignation stating the
reason of leaving for a better opportunity. (Sharma & Kesner 2000: 33–60.)
One of the executive managers (vice president of operations: Ned Carpenter) in a carpet
company (Kinsington Textile Inc. KTI) entered with grandiose ideas and enthusiasm
that lead the company to achieve five years plan in just three years. Along with innova-
tive ideas and previous knowledge to put in manufacturing had broadened the compa-
ny’s market to compete as one of the best company in the carpet industry. Undoubtedly,
his thriving efforts in this company has brought the first breakthrough in shape of new
upcoming project fibre-coating in years. Sharma & Kesner (2000: 33–60.)
Although, resignation is the real shock for top management and more upsetting for Paul
Simmonds (CEO of the company) to discover the reason as the better opportunity is to
work with their main rival company. But, it does not seem so sudden; it witnessed by
top managers that some heated arguments between CEO and vice president regarding
the new project may encourage him to leave the company - where CEO does not want to
listen to other’s opinions and stick to his own points. Here the crisis knocks at the door
of the company in shape of leadership in crisis – engine (VP) of the company’s resigna-
tion. Sharma & Kesner (2000: 33–60.)
In the above-stated circumstances when company face the crisis in the shape of the
resignation of a key manager can consider the following damage containing points to
deal with the situation.
57
1. Direct conversation with vice president is better than to speculate his motives behind
leaving.
a. Leaving personnel always desires a friendly departure.
b. If his complaints are heavily monetarist, the company should offer him compen-
sation package to stay and excel.
c. If he already sets on leaving; would it be a friendly departure or anything top
managers can help him to iron-out.
d. It is management’s duty to persuade him to agree that he will not steal personnel
or say anything negative about the company to damage its reputation. This
agreement must be in written or at least verbal.
2. Internal and external communication is essential at this point.
a. An internal memorandum stating current situation of vice president’s resignation
and wish him good luck for future.
b. Draft a press release in a friendly tone. It would be impressive to add some
quotes from vice president in company’s reverence.
3. Company’s top management must address the replacement issue.
a. Second in command may not suitable for quick replacement.
b. Position may be held vacant until top management spokes with workers/peers in
the department.
c. Additionally, a new appointment can also be an option to refill the vacancy. For
this, Search may not begin from scratch; previous hiring process can provide a
suitable candid for this position when leaving VP was appointed.
4. Any legal action against vice president.
a. It is not advisable to take legal action against vice president unless he has not
discovered guilty of unleashed upcoming projects to his new employer or any
company’s secrets.
b. It would send negative impressions that company does not trust its employees
and assume worst about those who leave the company.
58
c. It is undesirable to ask your employees to sign Non-compete clause to prevent
future shock likely to happen. That would be unrealistic to restrict people’s ca-
reer in small manufacturing industries like carpets to never work again in this
industry if they leave this company.
d. When this crisis has passed, an open and honest communication channel in the
company is essential to break narrow-minded and defensive culture to prevail in
future. Sharma & Kesner (2000: 33–60.)
Figure 3. Leadership in crisis response model (quick overview).
As shown in (Figure 3.) key managers’ resignation can be a great shock for executives.
Where shareholders feel that personnel as an asset to the company. However, this type
of crisis happens by overlooking the situation and inflexible behaviours, that triggers the
Overlooked problem
• Nothing wrong, smooth functioning, everyone happy (Misconception)
• Silent disagreement b/w CEO & Vice President Operation (Warning Signals)
• Conflicting Approaches (CEO's ignorance)
CRISIS
• VICE PRESIDENT OPERATION'S RESIGNATION
• Five years change program achieved in three years
• Turned the company from worst to the best
TOP Management
SHOCK
• Fear of Fall of organization
• Risk of Future Plans
• Shareholders' negative reaction
• Competative,market,media pressure
Quick
Response
• Explore Reasons of resignation
• Invite to return or take decision back (offer monetry compensation to stay and excel)
Damage
Control
Strategy
• Consultation (advisors/Lawyers)
• Internal & External Communication
• Arrangment for suitable replacement
Post-Crisis Strategy
• Exit Interview (written)
• Documentated Quaries relating disclosure of Future plans and assets of company and employees detachment
59
event to the more serious stage of no return situation. Later due to a shortage of time,
the quick decision may require containing damage and post-crisis strategies can mini-
mize the later similar crisis to happens. Figure 3 shows the sequential steps of events to
provide a comprehensive picture of the illusionary case of leadership crisis discussed in
this research question.
Internal / external communication challenges
There is basically two main challenges company and top management may confront
regarding its shareholders; first, they need to reassure its shareholders that the company
is still strong and directive and other is to prove this by future dealings. It is the time
when top management should be composed, equally important to hold anger and desire
for revenge especially while communicating with stakeholders (media, press, staff).
Therefore, low-key recognition of achievement and expression of regret over resigna-
tion would be feasible for internal and external communication. The most important
message is to confirm the continuity of the company’s operation; that to affirm the strat-
egies and initiatives are unchangeable due to his departure. Reporters from local and
trade press would likely to ask about personal/personality aspects of the story and in-
quire about future projects/new products respectively. Company’s top management also
inform reporters about the replacement of vice president. If there is any suitable re-
placement is available at hand would probably strengthen the company’s continuity
message, otherwise second in command may take the responsibility on a temporary ba-
sis if management feels it reasonable. Sharma & Kesner (2000: 33–60.)
Internally, CEO must talk with senior executives and arrange one to one meetings in
next day or two with each top manager to discuss their roles and to assure their worth
for the company. Consequently, it is desirable to stimulate the teamwork in the times of
crisis. Under these circumstances, communication with employees is imperative, for
this; memos through emails, posts in workers’ cafeteria and departmental bulletin
boards can be used. These memos should clearly state the vice president’s resignation,
regret note and importance of each employees’ role for continuity to company’s com-
mitment. Sharma & Kesner (2000: 33–60.)
60
Because it is a public company, management needs to inform its key institutional stake-
holders. A brief announcement regarding resignation and commitment to continuity
would be sufficient in a broader financial market. Additionally, calls to few valuable
customers would be a positive act to consider them as strong stakeholders in times of
crisis. Sharma & Kesner (2000: 33–60.)
Along with damage control strategies, the company must act quickly to communicate
with resigning vice president. Remember to nominate the suitable manager that would
not be CEO but vice president Human Resource (VPHR) who can take the lead to talk
about exit interview with departing VP. It is necessary to inquire VP if there are any
trade secrets he keeps or he solicits any employee or customer of the company. It should
clearly deliver that company will not hesitate to take legal actions against him, if he will
disclose any confidential business plans or upcoming fibre-coating projects to his new
employer or outsiders. Additionally, everything that he learned about the company
while staying there is the confidential and absolute property of the company. Sharma &
Kesner (2000: 33–60.)
It is undesirable while responding to this kind of crisis, to waste energy and time in
making new policies for instance non-compete clause to retain remaining employees,
rather pay full attention over building the morale of the company. Similarly, a war like a
behaviour can open more challenges for the company, where the industry has slender
profits making and huge competitive atmosphere to survive. So, the core objective is to
regain the strength and handle the internal business affairs with a progressive attitude.
Sharma & Kesner (2000: 33–60.)
In post-crisis phase, the company needs to emphasize on two prominent issues to avoid
any such event happens again. First, to hire an advisor or a lawyer for CEO to negotiate
with other senior executives and managers; vice president might be working on new
projects with other executives if this had arranged earlier. It observes that CEOs are the
loneliest person in the company, the position they hold make them decisive, and com-
petitive nature repress them to express their concerns, doubts and uncertainty. Second,
61
the company need a written corporate policy to protect company’s trade secret in similar
future crisis; a reasonable post-employment restriction treaty like confidentiality agree-
ment or nondisclosure agreements. The company does not need to take extreme step by
asking their employees to sign a non-compete contract, resulting to restrain them to
work in the carpet industry and risk their professional career. Though, the only objec-
tive, for now, is to safeguard confidential information from falling into wrong hands in
future. Sharma & Kesner (2000: 33–60.)
4.4. Research question # 4: To map suitable contingency management strategies
based on the emergency response, size and scale of the crisis in organiza-
tions.
Different organizations may react differently to the events that are anonymous to their
routine business activities, and this response is highly influenced by the structure, type
and management model of the organizations. A car accident or a house fire can become
a lifetime crisis for their victims who may not fully recover in their remaining life.
Thus, a small group crisis or an individual crisis may not affect community and society
as a whole. Similarly, a computer crash in one department and a fire in one room due to
mistakenly turned on a fan during weekdays is less likely to be critical than the loss of
all computers and complete building on fire during a weekend. Thus, as the size or scale
of crisis changes, the required response and recovery resources may also vary. A situa-
tion may likely arise during a crisis where demand surfeits the supply of emergency
resources, thereby, creating further complications in contingency management and relief
efforts. If this pattern continues, it generates a ripple-type sequence of crisis events.
(Heath 1998: 10).
To completely grasp the understanding of various aspects of crisis management and
devise a clear and suitable contingency plan or strategy, it is crucial to analyze real-life
examples. Furthermore, such analysis may help in identifying tools to mitigate common
crisis management mistakes such as negligence in response, and organizational culture
lacking emergency management training. For this purpose, we introduce three examples
of real-life crisis situations in both public and private sector organizations. Although the
62
focus of this thesis is to provide a conceptual framework for crisis management in pub-
lic sector organizations, examples from both private and public-sector organizations
would highlight the key differences between the management strategies and provide a
comparative perspective.
To provide a systematic account of the crisis situations and their management in these
examples, we describe events in the three-stage format namely pre-crisis, crisis re-
sponse, and post-crisis followed by a detailed analysis using common headings defined
below.
Precursors are the interrelated but mostly ignored events, for instance, warning signals.
Crisis onset marks the time period between the precursor and the point when the crisis
begins to cause damage.
Crisis impact is the effect of the crisis on the surrounding environment, which include
people and the infrastructure.
Crisis impact management refers to the actions taken to reduce crisis impact.
Impact recovery management is a process carried out in parallel with the crisis impact
management and includes efforts for recovering people and restabilizing infrastructure
and resources to an operational state. In short, all the actions needed to normalize people
and restore the environment to a prior state that existed before crisis onset is known as
impact recovery management.
Unheeded variables are the overlooked tendencies.
Company’s level of confidence is one of the core factors that allow an effective overall
crisis management strategy. Well reputed and well-organized companies are more con-
fident in dealing with crisis situations.
63
The critical outlook for the overall management provides the management perspective
and criticizes the management strategy commenced for resolving the crisis.
The XY line graph The graphical representation of real-life cases provides the progres-
sion of the crisis events (two or more points). A line graph can indicate the independent
and dependent variable and sometimes only use to display multiple dependent variables
on one graph. Therefore, I use the XY line graph to present the following three real-life
cases. Where crisis cause (or sometimes warning signal), action/ response, crisis impact
and safety levels are used as multiple dependent known variables (Y-axis) with one in-
dependent variable of time/weeks/days (x-axis). Additionally, it is important to note that
the independent variable (time, x-axis) is definite variable while y-axis does not use for
the accuracy of data but to shows the progressions of known variables.
4.4.1. Real-life case#1: King’s Cross railway station, London (1987)
During the 1980s, London underground metro system was operated by London
Transport Department and covered many locations in the city. In 1985, one person was
burned and killed in a fire at Oxford Circus railway station causing a widespread public
concern about fire protection and safety issues in the railway system. After the incident,
a government level inquiry recommended a ban on smoking in underground metro sta-
tions and creating a strong vigilance by notifying staff absence through an alarm system
during working hours. Heath (1998.)
Pre-crisis
The King’s Cross underground railway station of London metro is located in an area
with a great historical significance dating back to the time of the Roman invasion of
Britain. During mid 80’s, this station used to operate around 250 thousand passengers
on daily basis. On November 18th, 1987 at 6:30 pm, apparently in a brief incidence, a
commuter noticed smoke and smell of burning rubber at King’s Cross railway station
and immediately informed it to a booking clerk in the ticketing office of the station. Just
64
after the rush-hour, at 7:35 pm, fire blasted across the ceiling and around the upward
direction escalators of the station. Heath (1998.)
Crisis events
The initial emergency response from the available staff at the station was unbelievingly
slow and casual. An administration worker tried to investigate the source of the fire but
failed in activating the water sprinkling system for extinguishing the fire. According to
the witnesses at the site, the initial emergency response was very slow. Everybody
around the incident couldn’t sense the gravity of the situation as alarms were not sound-
ed. At 7:42 pm, an attempt for evacuating passengers through train failed due to the
shortage of rescue staff who can assist people. The fire labelled the event as a major
incident and more assistance was requested at the site around 7:53 pm. All emergency
units including police, ambulances, and the nearby hospitals were put on red-alert. At
9:42 pm, the casualties were shifted to the hospital while the first official announcement
about the 32 deceased and 20 seriously injured people was made at 11:32 pm and the
fire was extinguished at 1.42 am. At midnight, the British Prime Minister Margaret
Thatcher visited the University College hospital to show solidarity and offer comfort the
victims. This also fended off the media and opposition’s criticism. The hospital staff
took Prime Minister’s visit as a disruption in their aid services to the injured. The hospi-
tal management faced a huge difficulty in handling this acute crisis, mainly due to re-
duced financial budget for National Health Service. Heath (1998.)
Post-crisis
An inquiry was conducted under Desmond Fennell in 1988, which lasted for 91 days.
After hearing over 140 witnesses, the inquiry report made 157 recommendations. Some
of the major recommendations include the replacement of wooden escalators with metal
escalators fitted with a heat detection system, provision of an automatic sprinkler sys-
tem, refresher courses in safety and emergency response for the railway's station staff,
and an improved communication system. For victims, both deceased and injured, a little
compensation of £2500 was offered by the London Transport Department which out-
65
raged the victims and their families who considered it as mean offer by the government.
This led to claims filed by the victims against London Transport Department. Heath
(1998.)
Figure 4. Graphical representation of King’s Cross railway station fire incident in 1987.
As shown in (Figure 4.) four known dependent variables (smoke/fire, Action, crisis im-
pact and safety levels) are plotted in relation to the progression of the independent vari-
able of time (x-axis). Here time is the only definite variable that shows the development
of events, and response also helps to label the three stages of the crisis in form of pre-
crisis, crisis event and post-crisis.
Crisis analysis:
Precursor:
The death of a commuter at Oxford Circus railway station two years prior to the King’s
Cross railway fire station incident was a clear signal for improving the safety conditions
major fire incident more
assistant needed
call fire brigade
asked more assistance
all victims removed
PM Visited victims
Evacuation via train
failed
6:30 PM 7:35 PM 7:36 PM 7:42 PM 7:43 PM 7:45 PM 7:53 PM 9:42 PM 1:42 AM at mid
night
Smoke & Fire Action/Reponse Crisis Impact Safety Level
Pre-Crisis Crisis Response Post-Crisis
66
in London’s railway system. However, the precursor, in this case, must be considered
with respect to the King’s Cross railway station and seizes the moment when a commut-
er noticed a burning smell of rubber and some indications of fire.
Crisis onset:
The crisis onset occupied a very short period of time, starting from the moment when
conditions for ignition of fire were first observed by a commuter until the fire finally
became visible.
Crisis impact:
The most significant aspect of crisis impact, in this case, was the safety of commuters
travelling through King’s Cross railway station and then saving the infrastructure from
the fire flashes.
Crisis impact management:
The crisis impact management continued from the alarm generated by John Hickson at
6:30 pm until 1.42 am when the official statement was released about complete fire ex-
tinguishing.
Impact recovery management:
The impact recovery management, in this case, continued for a very long time.
Although the station was repaired and returned to its full functional capacity, treatment
of any injured commuters continued for many years along with the legal actions against
the damages incurred.
Unheeded variables:
King’s Cross railway station fire incident is a complete example of poor management
and negligence on the part of London Transport Department. Shortage of staff, lack of
necessary emergency response training, constrained budget, wooden escalators and inef-
fective alarm systems all played a crucial role in this heinous disaster.
67
Level of confidence:
With budget cuts, unavailability of staff and necessary training, unclear response strate-
gy and overall crisis management policy, missing standard operating procedures and
casual attitude of officials contributed in the worst level of confidence of the manage-
ment.
The critical outlook of the overall management:
Following the tragic death of a commuter on London metro in 1985, the underground
metro safety and protection already came under the light before the King’s Cross rail-
way station incident. Therefore, smoking was already banned in all unground stations,
but people constantly ignored it and lit cigarettes on the way out while taking escalators.
Investigation of the King’s Cross railway station fire and other similar incidents proved
that the wooden escalators were the main source of fire blazes.
In Kings Cross Railway Station case, as evident from the Fennell inquiry, safety priori-
ties were compromised and emergency response training for the staff was never consid-
ered. Disregarding the fundamental crisis management principles reflects the culture
that culminates in an organization. Another related factor, in this case, was the unavail-
ability of staff at the time of the fire as most of the on-duty staff was absent for meal-
breaks or some other off-work activity. Those who were available were completely un-
familiar to with standard emergency response procedures such as, activating the fire
extinguishing system and evacuation of the passengers. On top of this, when the profes-
sional firefighters arrived at the scene, their relief activities were hampered for about an
hour due to the missing layout information of the King’s Cross Station.
The first and the foremost responsibility of managers is to manage. But in this case, the
station officer Colin Townley reacted heroically and hastily to save victims and couldn’t
realize the importance of using the breathing apparatus. This resulted in his own death
due to suffocation from smoke. Undoubtedly, he risks his life to save others but at the
same time, he failed to take safety measures and managing his squad during the initial
crisis response period.
68
A major crisis management element lacking, in this case, is the poor communication
system. The need to communicate during a crisis is not limited to the affected organiza-
tion only, but in fact, the outside world must also be addressed about the incident for
reputation and image management. King’s Cross fire incident illustrated many commu-
nication and image management issues in the warning indications and evacuation pro-
cess. The transport police decided not to stop trains at the station, which was against
official procedures. The information available during the crisis may appear to be unclear
under the severe stress of the situation. The failure of image management is also
apparent from the mean compensation of £2500 offered by London Transport Depart-
ment for seriously injured and deceased persons.
4.4.2. Real-life case#2: Pepsi syringe hoax failure (1993)
Pre-crisis
In 1993, the Pepsi corporation faced a popular crisis of its time that began with the
claims of foreign objects, such as, syringes, sewing needles, screws and pins being
found in Pepsi cans.
Crisis event
Late night on Wednesday, June 9th, 1993, an elderly couple from Tacoma Washington,
supposedly discovered a syringe inside a Diet-Pepsi can (as shown in Figure 5). Next
morning, they called their lawyer and handed over the evidence to launch a legal case
against the refreshment industry giant. Press took the attention and reported the rumours
about unsafe Pepsi cans.
The next day, the second similar case was reported by a woman in Federal Way, Wash-
ington (10 miles away from the first reported incident). As shown in (Figure 5) the ac-
tion/response took by The Food & Drug Administration (FDA) by giving warning to
consumers in Pacific Northwest to pour soda into the glass before drinking. No recall
was ordered by FDA since the injury was reported or harmful objects found in syringes.
69
As both cases were registered in Washington, FDA noted that a local bottler company,
Alpac Corporation, was involved. Pepsi in an initial confusing state made Alpac’s exec-
utives available for media talk.
In the following days, various claims of foreign objects in Pepsi beverage containers
were reported from around the country including Portland, New York, Ohio, and Jack-
sonville Florida.
Post-crisis
Considering the magnitude of the crisis at the time when the first complaint was report-
ed from outside Washington, Pepsi formed a core crisis team comprised of 12 company
members. The team was made of various key divisions within the company including
executives, the public affairs department, consumer relations, scientific and regulatory
affairs, sales and marketing, manufacturing, and the legal department. Pepsi decided to
address the issue internally rather than handing the situation over to its hired external
public relations company. On the following Tuesday, Company’s president Craig
Weatherup was taking rounds of interviews on TV, and said: “We have gone through
every can line, every plant, numerous records and all the evidence points to syringes
going into the cans after they were opened”. Company news and press release along
with graphics were circulated to ratify the impossibility of contamination during the
production and packaging process. FDA, explicitly, believed that complaints against
Pepsi are not true, but merely hoaxes. These tampering claims against Pepsi did not
mark any sale drop, though prices were reduced around one dollar in early days of the
crisis. Except one or two small retailers not a single supermarket or retailer refused to
trade Pepsi.
On the same day when Craig Weatherup went on air, FDA announced the first official
arrest against the filing of the false report, a crime punishable by five years prison and a
fine of 250,000 dollars. In Colorado, a woman customer was caught on a surveillance
camera where she was clearly seen inserting a syringe into a Diet Pepsi can in the ab-
sence of the clerk. This became crucial evidence and became instrumental in clearing
70
Pepsi’s name. Pepsi then televised the same video all over the country. At the same
time, it also constantly communicated the safety updates to its retailers nationwide on
daily basis through its 600 offices, distributors and bottlers. Moreover, to facilitate cus-
tomers, 800 phone lines were established. During a week, about 50 false tampering
complaints were reported and more than a dozen people were arrested on false charges.
Pepsi published a print advertisement in all major newspapers on the following Mon-
day, including USA Today and The New York Times. The main heading of the news
was "Pepsi is pleased to announce…nothing." with an explanation, "As America now knows,
those stories about Diet Pepsi were a hoax. Hundreds of investigators have found no evidence
to support a single claim." and the concluded with the statement of recognizing peoples
support "the millions of you who have stood with us…."
Figure 5. Graphical representation of Pepsi hoax in 1993.
Figure 5. graphically represents the crisis lifecycle marking all major events and re-
sponse activities and impact. The abscissa (x-axis) represents the time duration in days
and weeks while ordinate (y-axis) intuitively presents the progression of known varia-
bles. As we seen in the graph the first object (blue line) was found on 9th June and con-
tinued until 2nd week when about 50 false reported were registered, while first response
first syringe reported
about 50 false
reports filedFDA took action &
warned consumers
minor price decline
9th June 1993 10th June 1st week 2nd week
Time/Duration
Objects found in beverages Action/Response
Crisis Impact Quality assurance/control
Pre-Crisis Crisis Event Post-Crisis
71
was taken out by FDA when the second object reported on 10th June, though a continues
investigation was carried out throughout the crisis process till the end of the crisis event.
A constant orange line shows the elevated level of quality assurance, while grey line
indicates a minor slop of price decrease at the end of 1st week in form of crisis impact.
Crisis Analysis:
Precursor:
There was no early sign or signal available for this incident. In this case, the absence of
a precursor is due to the fact that it was an orchestrated incident to snug a big business
for squeezing money.
Crisis onset:
The time between the first syringe found and multiple later 50 false reported incidents
was very short comprised of one week. But in this case, no real crisis happened,
however, it was proved as a hoax and all false allegations were charged with arrests and
fine.
Crisis impact:
The most crucial side of this crisis was the possible reputation damage for Pepsi Corpo-
ration as it was on high stakes. If happened, it could lead to a huge financial loss. How-
ever, the crisis did not induce a significant impact, both in terms of economy and repu-
tation. This is due to the effective crisis management actions taken by the Pepsi. A very
small fraction of retailers stopped the sale of Pepsi beverages and Pepsi had to lower its
price a bit for Pepsi cans to maintain the sale. (shown in figure 5 as crisis impact of mi-
nor price decline)
Crisis impact management:
The main goal and strategy of Pepsi were to restore its trust and credibility with the
customers. It was achieved through a thorough research and investigation for a possible
contamination of their products in question, i.e., Pepsi cans, keeping media and retailers
updated on regular basis about the facts of the investigation, closely following the pub-
72
lic opinion as the story developed during the crisis life-cycle, and strictly monitoring the
sales.
Impact recovery management:
The main course of action in terms of impact recovery management was to constantly
strive for the circulation of the message on key facts during the development stage of
the crisis. For this purpose, Pepsi used all possible communication means from TV
news channels to the print media. This greatly helped Pepsi in maintaining the image
and reputation of the company.
Unheeded variables:
It was ultimately concluded that the situation was orchestrated to clutch money from
Pepsi. By successfully handling the so-called crisis-like situation, Pepsi proved its worth
as a strong and vigilant company. Pepsi also learned an important lesson from this
staged drama that these incidents are hard to ignore and a robust strategy must be de-
vised to deal with hoaxes like these.
Level of confidence:
In case of Pepsi syringes hoax, Pepsi Corporation was confident of packaging process—
the beverages products were invulnerable to tampering and no foreign object could pos-
sibly be inserted into the products during the process packaging process. Before the cri-
sis began, consumers had a complete trust in Pepsi products. Therefore, the time when
complaints were filed and rumours were spread, the rapid response from the company
with authenticated facts against all the allegations were quashed and proved to be hoax-
es. After the crisis was over, customers expressed sympathy for the company and their
confidence over products become stronger.
The critical outlook of the overall management:
Pepsi’s overall crisis management strategy was a complete success and can be divided
into three distinct goals: (1) informational objectives, (2) attitudinal objectives, and (3)
behavioural objectives. The informational objectives point out to the aspects related to
effective communication, which was achieved through active campaigning of investiga-
73
tion facts and findings to media, customers and retailers. The attitudinal objectives refer
the image or reputation management and arguably the most important of all the objec-
tives. The attitudinal objectives aided in keeping a pause in the public opinion through-
out the case. The perception of a crisis could possibly ruin the global image of Pepsi.
This was addressed by taking the complete responsibility of solving the issue and in-
forming real facts to the consumers. A hotline operating 24/7 ensured that all queries
and concerns of customers are responded appropriately for keeping the integrity of the
company. Finally, the behavioural objectives included the close observation of sales
during this period. Fortunately, the sales dropped insignificantly and the approach to
work on this objective was to keep positive public relations with the retailers and busi-
nesses that sold their products. This tactic guaranteed customers that the products they
are using are safe for their health. Hence, the Pepsi Corporation followed everything
correctly according to successful and proved crisis management practices. It acted
quickly and responsibly, was completely transparent and resolved the crisis in a short
period of time.
4.4.3. Real-life case#3: PNC bank Philadelphia USA (1996)
PNC Bank is one of the banks in USA operating branches in eleven states of USA and
also extends its operations overseas. The bank has a qualified emergency response team
that focuses on continuity, human resources, security, public relations and risk man-
agement. The PNC regional headquarter is located in the famous 45-floor building of
downtown Philadelphia. Heath (1998: 103–106.)
Pre-crisis
At 8:30 am on June 10th, 1996, a security person reported smoke and possibility of fire
in the front teller area by telephone. The duty crisis manager was in confusion whether
he should call emergency since the fire alarms were not activated. The manager decided
to call the fire department and decided to put bank’s security and continuity team on
alert. Heath (1998: 103–106.)
74
Crisis event
Within next five minutes, emergency response team along with insurance adjuster was
alerted. Until 8:45 am, no fire was visible. A virtual command centre was also
activated—one in which team members communicate with each other through
electronic means. Bank’s security and continuity team was sent to the site. After a few
minutes, the fire became visible, and the professional firefighters swiftly contained the
source of the blazes making water, smoke, dust and damage visible. After assessing this
situation, the on-site incident manager decided to call for continuity and recovery
provider for the environment and safety testing before any suppliers or customers enter
the premises. A probable damage to electronics equipment, record and currency, air
conditioning, furniture and fixtures and interior was expected. Within two hours, PNC
bank recouped control over the site from the response and recovery activation. Heath
(1998: 103–106.)
Post-crisis
The emergency response team scheduled a press conference. According to damage as-
sessment team, the first floor (banking branch) was a completely damaged, and the sta-
tionery, records, currency and furniture on floors above suffered damage from water,
smoke, and heat damage. At the end of the day, all critical issues were sorted out. For
instance, fire rubble and damage due to water and smoke was cleaned up, customers
were directed to other branches, toll-free numbers were provided for customers’ inquir-
ies, insurance claims had been lodged, safe deposit boxes were transferred to other
branches, computers and other equipment were retrieved, and all-important record was
restored by experts. (1998: 103–106.)
75
Figure 6. Graphical representation of Crisis life-cycle for PNC bank building fire in 1996.
As shown in (Figure 6.) the warning signal was recognized and action was taken during
smoke at 8:35 am. After 10-13 minutes of visible fire, more emergency teams were
called and emergency response was well-managed and continues without delay. Though
the crisis management and safety level was high and got full control over the situation
within two hours but the degree of loss was intensified due to complex organizational
system (Bank) where water, smoke, and heat damage occur to furniture, fixture, curren-
cy, electronics etc., therefore, management decided to renovate the building and the
crisis was over. Heath (1998: 103–106.)
Crisis analysis:
Precursor:
The first signal was visible when the security personnel reported smoke and possibility
of a fire, but the crisis manager failed to detect it as he got confused with the fire alarms
because none of them was activated.
smoke
emergency response
team,insurance
adjuster alerted
first floor total loss
renovate
building
no fire alarm due to smoke
8:30 AM 8:35 AM 8:45 AM 8:48 AM 10:30 AM
Smoke and Fire Action/Response Crisis Impact Safety Level
Pre-Crisis Crisis Event Post-Crisis
76
Crisis onset:
The crisis onset started with half an hour of the precursor when the fire was finally visi-
ble.
Crisis impact:
The fire left the first floor, the banking branch, completely damaged with all the equip-
ment, furniture, and record melted into dust and smoke.
Crisis impact management:
The crisis impact management is manifested from the following chronological actions.
1. Fire department alert.
2. Security alert.
3. Business continuity team alert.
4. Emergency response team alert.
5. Establishment of a command centre.
6. Dispatch of security and continuity team to the site.
7. Firefighters contained the site.
Impact recovery management:
After launching the command centre, recovery timelines and other necessary processes
were scheduled. Customers were directed to alternate branches and security was in-
creased. A toll-free number was created and publicized to facilitate customer inquiries.
Insurance claims were submitted and electronic equipment was retrieved for restoration.
The rubble and damaged equipment were continuously cleared off.
Unheeded variables:
A small plastic fan was accidentally left on over the weekend in one of the front teller
boxes, therefore, that overheated fan caused a fire. Similarly, the fire alarm did not work
because that was turned off to allow repair work on the upper floor by a new building
manager, who had forgotten to turn the alarms back on.
77
Level of confidence:
A quick and coordinated team response made it possible to control the situation in a
very short time (two hours). The trust and confidence were developed through effective
training and local response teams.
The critical outlook of the overall management:
It is important to note that during this crisis response-to-recovery took 48 hours and
finally it was decided to renovate the necessary parts of the building. If we analyze the
whole crisis management strategy, the two most significant factors are revealed: (1) the
timely and effective communication and (2) the rapid response that reduced the impact
of damage inflicted by the fire. The PNC bank had a clear standard operating procedure
for dealing with such a crisis and the multigroup approach where various specialist
teams worked towards the recovery bore the fruit. The multiple teams assisted in
managing different aspects of the crisis according to their expertise but at the same time
maintained necessary communication with each other to ensure the smooth recovery
process. The virtual command centre also played a crucial role in providing clear
directions to the teams and facilitated coordination among them. Another important
aspect that needs to be highlighted in this case is creating organization reputation and
building a trust relationship with local response agencies so that a response to the crisis
can be realized. Finally, the impact recovery management actions speak for themselves
and illustrate the importance of handling customers. The creation of toll-free number
and guiding customer’s to alternate branches supported the overall crisis management
strategy.
Synopsis: Real-life examples
The above three real-life examples are critically evaluated for the provision of contin-
gency management strategies. As mentioned earlier that the size and scale of crisis
affect the degree of response according to the structure and emergency management of
an organization. For this purpose, despite the nature of organization; public-private, all
three-real-life example are critically argued in three stages (pre-crisis, crisis event, post-
crisis) and evaluated in same manners; including precursor, crisis onset, crisis impact,
78
crisis impact management, impact recovery management, unheeded variables, level of
confidence, the critical outlook of the overall management. The graphical representation
is used to show the clear difference between emergency response/impact of real-life
examples and to provide the progression of the crisis events in a glance.
It has been observed that all three cases vary in their emergency management plans. In
the first case of Cross Kings railway crisis, for instance, we found a huge emergency
management failure, due to many factors including lack of training, insufficient staff (on
spot), shortage of resources, ignored warning signals, delay in response, insufficient
compensation, vulnerable structure, crisis miss-management, and ineffective communi-
cation. In the second example of Pepsi syringe, we found that though it was false allega-
tions against the company, due to well-trained staff, effective communication, high-
quality assurance, quick response and decisions, complete investigation and invulnera-
ble production process and effective management; it was well managed and control.
And lastly, in the third case of PNC bank, we found a qualified emergency manage-
ment, well-trained workers, effective communication, quick decisions and response,
ignored warning signal, customers directed to alternate branches.
It is argued that the emergency response according to the size and scale of crisis can
control the loss and severity of the overall crisis. Although, the initial warnings signals
were ignored in both cases of king cross railway station and PNC bank case, due to
quick and trained emergency management strategies the loss was less in case of PNC
Bank. However, it is proved in case of Pepsi syringe that the robust emergency man-
agement strategy is a great achievement for the organization.
79
5. SUMMARY AND CONCLUSION
From a public-sector perspective, crisis management constitutes a conscious, efficient,
organized and coordinated set of actions performed to avoid crisis situations before they
occur or become uncontrollable or to minimize the possible damage if they happen; for
the smooth provision of public services without delay. At the same time, it is important
to preserve the reputation of the institution and maintaining public trust and support.
The main objective of this study is to craft a systematic understanding of crisis man-
agement in public organizations and develop a conceptual framework that can possibly
address some of the crucial aspects of crisis and their management. The study is based
on a thorough literature survey and argumentative analysis of various theoretical models
and strategies along with a real-life example for answering the four fundamental and
critical questions. In past several decades, different models and strategies were proposed
to circumvent crisis situations in organizations. The most significant of those have been
thoroughly covered in this study and include Steven Fink’s crisis lifecycle, Turner’s six
stages, Mitroff’s five stages, Coomb’s three-stage and Mitroff & Anagos CM Frame-
work approach.
Steven Fink’s crisis lifecycle is the earliest model that describes the consecutive stages
of the crisis namely; Prodromal Stage, acute stage, chronic stage, crisis resolution Stage.
Turner’s six stages of failure in foresight are mainly focused on complex organization.
Mitroff’s five stages of crisis management are the most comprehensive model that in-
cludes signal detection, prevention/preparedness, containment, recovery, and learning.
Coombs categorizes three crisis management phases namely pre-crisis, crisis, and post-
crisis phases. Mitroff & Anagos proposed crisis management framework in five catego-
ries; types of crisis/risks, mechanism, system, stakeholders, and scenarios. Every model
has specific implications for certain scenarios, but Coombs three stages approach is
evaluated as the most appropriate, simple and widely used model. Therefore, to analyze
the real-life examples, Coombs approach to crisis management is considered as the most
realistic and effective.
80
The first research question explores the difference between private and public-sector
organizations and investigates the nature of the crisis that may arise in public organiza-
tions. Crises may become unprecedented, transboundary and large in size whether they
are man-made or natural disasters. Public sector organizations are more likely to face
crisis based on governance, economy, technological and management system failure. In
contrast, private sector organizations are free from political and public scrutiny and
have limited stakeholders but they are accountable to the government, media, market,
customers and environment. With the availability of more resources, private organiza-
tions are typically capable of investing more in crisis management compared to public
sector organizations.
The second research question scrutinizes the critical factors that can help in avoiding a
crisis or minimize its damage. These factors include a strong leadership with capable of
taking instant-decisions and defining clear roles, good inter-staff relationship and neces-
sary training, prompt response and proactive approaches to handles crisis events, direct
and effective communication within the organization, with stakeholders, and compensa-
tion for victims.
The third question sheds light on the role of organization leadership during a crisis sit-
uation. A good leader must consider three major elements of the crisis, i.e., a threating
situation, limited time for decisions and actions, and lastly uncertainty and element of
surprise. In few scenarios, it may also be possible that key executives and managers
resign escalating the crisis situation. This can only be dealt effectively by considering
preemptive strategies and outlining a clear chain of command.
The fourth and final research question presents three real-life examples of crisis from
both private and public-sector organizations to illustrate the differences in management
strategies and analyze various aspects of crisis management according to the size and
scale of the crisis. These three examples include King’s Cross railway station fire, Pepsi
syringe hoax, and PNC bank fire. The XY line graph has been used to present the pro-
gression of the crisis event in three stages (pre-crisis, crisis, and post-crisis). The
graphical representation used two types of variables—dependent and independent.
81
Where time is an independent and definite variable (X-axis); whereas, other dependent
variable includes crisis event, impact, response, and quality assurance as (Y-axis).
This study used the argumentative strategy to evaluates different variables affecting the
contingency management plans where size, type, and structure of organizations is high-
ly influential. It is proved, however, in the opinion of the researcher that the public or-
ganizations due to its expanded operational activities, a huge workforce with restricted
training, and lack of capacity are typically incapable of concrete contingency manage-
ment. The thorough review of literature and analysis of the real-life examples highlight
leadership, communication and organization culture as the three most fundamental and
critical elements that cannot be ignored while dealing with crisis situations. With a ca-
pable leadership, effective communication before and during the crisis, and a healthy
organizational culture make possible to handle crisis situations even if limited resources
are available. Some open areas that are challenging and require further study for devis-
ing tangible management strategies include business continuity management and resili-
ence against crisis effects.
82
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